
Glass 
Book. 



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HOUSE No. 1850 



REPORT 



Special Commission on Social 
Insurance. 



February, 1917. 



BOSTON: 

WRIGHT & POTTER PRINTING CO., STATE PRINTERS, 

32 DERNE STREET. 

1917. 



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Boston, Mass., January, 1917. 
To the General Court of Massachusetts. 

The Special Recess Commission on Social Insurance, au- 
thorized by chapter 157 of the Resolves of the year 1916 to 
make certain investigations, has completed its work and begs 
leave to present the following report. 

Respectfully submitted, 

FRANK S. FARNSWORTH, 

Chairman. 



V 



MEMBERS OF COMMISSION. 



Senator FRANK S. FARNSWORTH of Leominster, Chairman, 
Senator WALTER E. McLANE of Fall River. 
Representative ALLISON G. CATHERON of Beverly. 
Representative EDEN K. BOWSER of Wakefield. 
Representative HARRY C. WOODILL of Melrose. 
Representative EDWARD G. MORRIS of Boston. 
WENDELL P. THORfi of Boston. 
JOHN P. MEADE of Brockton. 
EDNA LAWRENCE SPENCER of Cambridge. 



JOHN D. WRIGHT of Boston, Secretary. 



EEPOET OF THE SPECIAL COMMISSION 
ON SOCIAL INSURANCE. 



Chapter 157, Resolves of 1916. 

Resolve providing for the Appointment of a Special Recess Com- 
mission on Social Insurance. 

Resolved, That a special commission, to be composed of two members 
of the Senate to be appointed by the president, four members of the house 
of representatives to be appointed by the speaker, and three other persons 
to be appointed by the governor, shall sit during the recess of the general 
court, and shall be known as the Commission on Social Insurance. It shall 
be the duty of the said commission to study the effects of sickness, un- 
employment and old age in Massachusetts, to collect facts as to actual 
experience with the several forms of insurance therefor, and to recommend 
to the general court such legislation as it may deem practical and expedi- 
ent to protect the wage-earners of the commonwealth from the burdens of 
sickness, unemployment and old age, or any one or more of these. The 
state department of health and the bureau of statistics are authorized 
and directed to co-operate with the commission in every way feasible in 
canying out the purpose of this resolve, and in case either or both of said 
departments shall undertake investigations deemed necessary by the 
commission, they shall be allowed for their necessary expenses, outside their 
regular appropriations, such sums as shall be approved by the governor 
and council. 

The commission shall report to the next general court with drafts of 
such laws as it may recommend, and it shall file its report with the clerk 
of the senate or with the clerk of the house not later than the first Wednes- 
day in January. 

The commission shall have a room in the state house assigned for its 
use, shall give such public hearings as it may deem necessary, may em- 
ploy such assistance, clerical or otherwise, as it may require, and shall 
receive such sums for clerical assistance, travel and other expenses, and 
for the compensation of its members as shall be allowed by the governor 
and council. [Approved June 1, 1916. 

Subsequently the duty of making a further special investi- 
gation was laid upon the Commission so created by chapter 
164 of the Resolves approved June 2, 1916, which is as fol- 
lows: — 



SOCIAL INSURANCE. [Feb. 



Chapter 164, Resolves op 1916. 

Resolve requiring the Special Recess Commission on Social In- 
surance to include in its Investigation and Report the 
Subject of the Hours of Labor in Industries operated con- 
tinuously for Twenty-four Hours. 

Resolved, That the special recess commission. on social insurance estab- 
lished by chapter one hundred and fifty-seven of the resolves of the year 
nineteen hundred and sixteen, in addition to the matters already referred 
to said commission, shall study and investigate the subject of reasonable 
restrictions in the hours of labor in industries operated continuously for 
twenty-four hours, and shall include in its report to the next general court 
such recommendations, with drafts of proposed legislation, as it may 
deem practical and expedient. All the provisions of said chapter shall, so 
far as pertinent, apply to the investigation herein authorized. [Approved 
June 2, 1916. 

INTRODUCTION. 

Pursuant to the earlier resolve, the following persons were 
appointed to serve as members of the Special Recess Commis- 
sion on Social Insurance by His Excellency Samuel W. McCall, 
Governor of the Commonwealth : — 

Wendell P. Triore" of Boston. 
John P. Meade of Brockton. 
Edna Lawrence Spencer of Cambridge. 

By the Hon. Henry G. Wells, President of the Senate: — 

Senator Frank S. Farnsworth of Leominster. 
Senator Walter E. McLane of Fall River. 

By the Hon. Channing H. Cox, Speaker of the House of 
Representatives : — 

Representative Allison G. Catheron of Beverly. 
Representative Eden K. Bowser of Wakefield. 
Representative Harry C. Woodill of Melrose. 
Representative Edward G. Morris of Boston. 

The Commission held its first meeting on July 12, 1916, 
when it organized by electing the Hon. Frank S. Farnsworth 
as chairman, and John D. Wright as secretary. 



1917.] HOUSE — No. 1850. 9 

The Commission desires to record its appreciation of the 
valuable and devoted services of Mr. Wright as secretary of the 
Commission. 

Summary of Work of Commission. 

In the conduct of its work the Commission has carried on 
several special investigations more particularly described in the 
body of the report. It has held fourteen public hearings. 
Most of these were at the State House in Boston, but hearings 
were also conducted in Pittsfield, Holyoke, Fitchburg, Lowell, 
Worcester, Fall River and New Bedford. For the purpose of 
securing by direct observation knowledge of conditions in in- 
dustries operated continuously for twenty-four hours a day, 
the Commission visited both by day and night several paper 
mills engaged in the manufacture of different grades of paper. 

Upon the request of the Commission that it be authorized 
to attend the National Conference on Social Insurance at 
Washington on December 7, 8 and 9, the Council authorized 
and selected three members of the Commission to attend the 
conference on behalf of the Commission. The State -Depart- 
ment of Health and the Bureau of Statistics have co-operated 
with this Commission as directed by the Resolve. The Com- 
mission takes this occasion to acknowledge the valuable aid 
given by each department as far as possible within its limited 
time, and the courtesy with which the services of these depart- 
ments have been placed at its disposal. 

The Commission has also held thirty-two executive sessions 
besides numerous conferences with individuals who had special 
knowledge of the subjects before it. There have been in addi- 
tion many meetings of subcommittees, which were appointed, 
as follows : — 

Old-Age Pensions — Mr. Thore, Senator Farnsworth, Representative 

Woodill. 
Unemployment — Mr. Meade, Miss Spencer, Representative Morris. 
Health Insurance — Representative Catheron, Representative Bowser, 

Senator McLane. 

Among the more valuable services of the Bureau of Statistics 
was the preparation by Miss Moldenhauer, under the super- 



10 SOCIAL INSURANCE. [Feb. 

vision of the Bureau, of a summary of the legislation of the 
principal countries of the world which have provided systems 
of insurance for sickness, unemployment and old age. An 
examination has been made of the original sources in their 
original language, and the work has been brought as nearly 
up to the present moment as conditions permitted. This sum- 
mary is printed in the Appendix to the report. 

The State Department of Health in August assigned Dr. 
William W. Wolcott of that department to the special work of 
this Commission. Dr. Wolcott had preparation for work of 
this character, acquired both in private and in public service. 
He has kept in close touch with the Commission, attending its 
hearings and many of its executive sessions. By special au- 
thority of the Council he attended the Public Health Confer- 
ence at Cincinnati, where the subject of health insurance was 
considered. While on this trip he investigated private mutual 
systems of insurance against sickness existing in some middle 
western States. 

Dr. Wolcott's report to this Commission of the conference 
at Cincinnati and of the special investigations conducted by 
him is printed in Appendix A (page 178). 

Recommendations. 

As a result of its investigations and considerations the Com- 
mission recommends the enactment of the following legislation, 
and submits bills therefor as directed: An Act to establish a 
State Board of Employment, printed in Appendix C (page 274). 

The Problem of Poverty. 

The duty laid upon this Commission of studying the effects 
of sickness, unemployment and old age in Massachusetts 
brought before it at once the general problem of poverty. Per- 
sons of large means are not concerned with unemployment as 
an economic problem, and while they may not altogether avoid 
sickness and old age, they have resources with which to meet 
at least their financial burdens. But to those who, from lack 
of thrift or lack of opportunity, have made no provision for 



1917.] HOUSE — No. 1850. 11 

the time of special stress these three gaunt specters of human 
woe brjng a train of misery and evil consequences not limited 
to the individual, but attacking the social structure of which 
he is a part. 

Any attempt at eradicating poverty or mitigating its evils 
involves a recognition of the fact that its causes and conse- 
quences are many. This Commission, therefore, cannot pro- 
ceed to a discussion of the phases of social insurance, to which 
it has been particularly required to direct its attention, with- 
out a preliminary review of what are in its opinion some of 
the more important causes of poverty. It has made no special 
study of these causes, and undertakes here to do nothing more 
than direct attention to some of them for the purpose of 
showing that no system of social insurance, as the term is gen- 
erally understood, even including insurance against sickness, 
unemployment and old age, can be altogether successful unless 
an adequate survey is made of fundamental causes of poverty 
and means of relief. In enumerating these causes and means 
of relief no attempt is made to be exhaustive or to assign the 
order of their importance. 

1. Feeble-mindedness. — An examination of the social struc- 
ture of Massachusetts reveals at the bottom a class of indi- 
viduals too weak mentally to be self-supporting. They form, 
according to Dr. Fernald of the Concord Reformatory, some- 
thing like 15 per cent, of its population, and there is above 
this group an additional 42 per cent, so far subnormal that 
their capacity for self-support is problematical. According to 
Dr. Elizabeth S. Sullivan of the Reformatory for Women the 
feeble-minded and subnormal form about 45 per cent, of its 
population. Special studies undertaken in the Boston Municipal 
Court, in the State Prison, and in several of our jails and 
houses of correction, show that the feeble-minded or mentally 
defective constitute a large element in our criminal population. 
The Commonwealth provides special institutions for this class, 
where they may lead, so far as they are capable, happy, pro- 
tected lives. These institutions house about 2,600. 

At large in the community there are variously estimated to 
be from 10,000 to 15,000 feeble-minded persons. The feeble- 



12 SOCIAL INSURANCE. [Feb. 

minded are seldom if ever permanently self-supporting. They 
fill our prisons, almshouses and other charitable institutions. 
They present insoluble problems to our courts. Thgir special 
significance in a study of poverty is that their feeble-minded- 
ness is incurable and very highly inheritable, and that they 
are very much more prolific than members of the community 
in general. In mingling with the general population they 
introduce a weakening strain which tends to lower greatly the 
capacity of that population for normal self-support. They are 
a problem clearly recognized by its students, who agree that 
the least that can be done is to segregate feeble-minded females 
of child-bearing age. 

2. Insanity. — In the State hospitals for the insane, feeble- 
minded and epileptic this Commonwealth was in 1915 sup- 
porting 17,051 individuals at an expense of $4,031,352.68. 
Much insanity is preventable, some is incurable; some is 
caused by intemperance, some by sexual immorality. So far 
as it is preventable and curable, it presents one of the prob- 
lems of poverty to which the State should at least give the 
degree of attention which it has hitherto given the problem of 
relief. 

3. Intemperance. — The total consumption of alcoholic bev- 
erages in the United States in 1915 was 2,015,595,291 gallons, 
or 19.80 gallons per capita. We do not have the figures for 
Massachusetts, but there is evidence that 'consumption is very 
great. 

Economically the money spent in the purchase of these 
liquors was waste which, even without the other social conse- 
quences entailed by the consumption of so much liquor, could 
hardly be disregarded in any study of poverty. According 
to the report of the Commission to investigate drunkenness 
there were for the year ending Sept. 30, 1913, 104,936 arrests 
for drunkenness in Massachusetts. The same Commission 
estimated that alcoholism caused at least one-third of all crimes 
other than drunkenness. We should also bear in mind that 
the arrested drunkards are only a fraction of all drunkards or 
of those whose earning powers are lessened by alcoholism. Any 
estimate of the earnings lost on account of alcoholism would be 
enormous. The alcoholic is seldom permanently self-supporting. 



1917.] HOUSE — No. 1850. 13 

He readily falls into crime, and leads a disordered life, the 
general direction of which is toward poverty. 

The Commission to investigate the Increase of Criminals, 
Mental Defectives, Epileptics and Degenerates reported in 
1911: — 

It is the belief of this Commission, based on long personal observation 
that the abuse of alcohol, directly and indirectly does more to fill our 
prisons, insane hospitals, institutions for the feeble-minded and alms- 
houses than all other causes combined. 

In our opinion the adoption of any means by which the 
consumption of alcoholic liquors in this Commonwealth can be 
greatly reduced will go far to prevent and relieve poverty. 

4. Wages. — This Commission recognizes that it is normal and 
desirable that the individual should himself make adequate pro- 
vision for the hazards of life. To do this he must receive for 
his services a living wage, that is, a wage not only sufficient to 
support himself and his family in health, but to provide against 
sickness, unemployment and old age. Whatever stimulates 
or retards industry, or affects the supply of labor, has its 
effect upon wages. The Commission here simply desires to 
record its recognition that such economic problems as the tariff, 
immigration, taxation and the minimum wage cannot be di- 
vorced from a consideration of the subject specially assigned 
to it. 

5. Vocational Training. — Whatever produces a more effi- 
cient worker increases the likelihood of his earning living wages 
and of making suitable provision for the hazards of life. A 
beginning has been made in this Commonwealth in special 
vocational and industrial training. Such training should be 
much more generally provided. 

6. Thrift. — Evidence has been given before this Commis- 
sion of instances where individuals of even very low wage- 
earning capacity have accomplished remarkable results by the 
continuous practice of thrift. However appalling the situation 
of the lowest-paid wage earner appears in this Commonwealth, 
it is still possible for individuals and families to push from the 
lowest to the highest economic and social conditions by the 
exercise of intelligence, thrift, and, let it honestly be said, 



14 SOCIAL INSURANCE. [Feb. 

good luck. Any social measure which tends to remove the 
stimulus to such endeavor is unwise. Any measure which 
fosters thrift should be encouraged. The savings systems of 
our schools should be more widely extended. The savings 
banks, co-operative banks, and the more recently introduced 
system of savings-bank life insurance, are examples of wisely 
directed effort under State encouragement. 

It would no doubt be possible to set forth many other causes 
of such poverty as exists in this Commonwealth and many 
other measures for its relief. The Commission would further 
record its recognition of the fact that not only do the fore- 
going causes produce poverty, but poverty in turn goes far 
towards creating the conditions which we have enumerated, 
and so the vicious circle is continued. The Commission believes 
it has stated enough to show an adequate recognition of the 
complexity of the problem presented. It desires at this point 
to direct the attention of the General Court to certain facts 
gathered by the Bureau of Statistics which indicate the 
economic condition of the wage-earning group in this Common- 
wealth, and which must be borne in mind in considering the 
advisability of introducing any system of social insurance for 
wage earners. 

Economic Condition of Wage Earners in Massachusetts. 

According to figures computed for this Commission by the 
Bureau of Statistics the average wage of the laborer engaged 
in manufacturing industries in this Commonwealth in 1914 was 
$562.57. The Commission recognizes that in many families 
there is frequently more than one earner. It recognizes, also, 
that in the ordinary family the wages of the father should be 
adequate for the support of the family. There appear to be 
no accurate statistics regarding the family incomes of wage 
earners. 

Statistical averages are, however, very deceptive unless we 
realize that the existence of many families with incomes 
greater than the average stated means that there are many 
other families whose incomes are lower than the average. 

Such incomes should be considered in relation to the amount 
necessary for the support of a family. According to a study 



1917.] HOUSE — -No. 1850. 15 

made in Boston several years ago it was estimated that proper 
provision for a family of five required an income of $900 a year. 
But if we assume that this estimate is excessive, though it may 
be hard to show where the excess lies, and that only $700 is 
needed, we have an estimate which is very conservative, par- 
ticularly in view of the increased cost of living since the original 
estimates were made. With a majority of men earning $15 
a week or less, it is abundantly clear that there are a great 
many individuals who can have no substantial savings to meet 
the special stress of sickness, unemployment or old age. 

Any provision for sickness, unemployment and old age by 
the members of such a class can come only by savings taken 
from means of subsistence already too low. Such saving re- 
quires a force of character and a degree of thriftiness which can 
never be expected from the group as a whole. Nor is it suf- 
ficient to say that the individual has a chance to fit himself 
to earn better wages and by the exercise of thrift to provide 
for the future. While that statement is true, to a degree, of 
individuals better equipped in resolution, intelligence or 
physique than the average, it is not true, and it has never 
been true, of the mass of any large industrial population. All 
of us know cases of individuals of fair earning power and 
thrifty character who have come to want and suffering by 
reason of continued illness either of themselves or of their fam- 
ilies. Others have lost the savings of a lifetime, and have suf- 
fered a pinched old age because their natural business judgment 
or their training was not such as to enable them to safeguard 
their savings. The State which merely counsels thrift to such 
an individual but mocks him. It ought not to be too difficult 
a task of statesmanship to leave unimpaired sufficient incentives 
to thrift, and the development of that individual sturdiness 
which must be the very substance and strength of any Nation, 
while providing that a man who makes a fair attempt to earn, 
support his family decently and save something shall not under 
any circumstances be allowed to become altogether destitute 
or required to accept pauper relief. 

The problem is to find some way of meeting ills of which the 
incidence on any individual is uncertain, but which will cer- 
tainly fall upon many individuals in the class. Though the 



16 SOCIAL INSURANCE. [Feb. 

savings of any one may be insufficient for his burden, all 
together can bear the total burden if some way can be found 
to distribute its weight. The device of insurance exists for 
just such a situation. Nation after Nation has turned to it 
abroad, and in various schemes of social insurance has pro- 
vided for distributing the individual hazards of sickness, un- 
employment and old age. In the Appendices will be found a 
summary of such legislation. 

In this country we have individually adopted the principle 
of insurance on a vast scale. This Commonwealth has made 
it practically compulsory in its workmen's compensation act. 
It has recognized the value of the principle and assisted in 
establishing it as a voluntary plan in the system of savings 
bank life insurance. The existence of a multitude of fraternal 
insurance benefit societies, establishment funds, trade unions 
and private companies insuring against sickness, unemploy- 
ment or old age testify to popular support of the principle as 
a voluntary scheme. 

This Commission is unanimously of the opinion that the prin- 
ciple of insurance is a desirable one for application on a suf- 
ficiently wide scale to safeguard every wage earner in the 
Commonwealth from certain of the evils of sickness, unemploy- 
ment and old age. 

On the important and perhaps fundamental questions of 
whether the time is ripe for the adoption of any one of the 
plans submitted, whether participation in any plan should be 
compulsory for any large group of the population, whether the 
cost of any plan should be borne solely by the State, the em- 
ployer or the employee, or should be shared by some two or 
all of them, — on these and certain other questions there is 
some divergence of opinion in the Commission, which will be 
indicated as each of the three subjects — sickness, unemploy- 
ment and old age — is separately treated. 

Sickness or Health Insurance. 

Prior to the appointment of this Commission little attention 
had been given in Massachusetts to the question of the advis- 
ability of adopting some general system of health insurance 



1917.] HOUSE — No. 1850. 17 

for wage earners. The first health insurance bill was filed with 
the General Court of 1916. It did not attract much notice. 
Simultaneously with the consideration of the subject by this 
Commission, however, there has been a very general awakening 
of interest among employers, employees, medical men and the 
public. The subject has been considered by many groups and 
committees. Evidence given before this Commission at various 
hearings and conferences satisfies it that even among those who 
have given particular study to the subject opinion has not yet 
crystallized. Most groups appear to recognize the importance 
of the subject, and to desire further opportunity for study 
before undertaking legislation. 

In the opinion of this Commission, legislation on a subject 
of such magnitude and importance, and affecting so vitally 
such a large proportion of the inhabitants of the Common- 
wealth, should and probably must be adopted, if at all, only 
after thorough study and discussion, not only by such a com- 
mission as our own and by committees of the Legislature, but 
by the principal groups affected and by the public. 

The Commission is therefore unanimous in not recommending 
any health insurance legislation for immediate passage. Some 
of the Commission, while subscribing to the foregoing recom- 
mendation, are of the opinion that the Commonwealth, as soon 
as there has been adequate consideration of the details of leg- 
islation, should adopt a general system of health insurance for 
wage earners, supported by enforced contributions from em- 
ployers, employees and the State, and that such legislation is 
likely to prove of the greatest value in relieving distress and 
promoting the general welfare. Others of the Commission have 
filed dissenting statements which will be found on the pages 
following. 

Present Health Insurance Agencies. 

Any legislative consideration of the subject should be based 
upon a knowledge of conditions as they now exist. This Com- 
mission has therefore attempted to ascertain to what extent 
insurance against sickness now exists in this Commonwealth 
under voluntary plans. Its investigations have disclosed a 
great variety of organizations furnishing sickness insurance. 



18 SOCIAL INSURANCE. [Feb. 

Among them are private insurance companies, establishment 
funds or benefit societies connected with particular industries, 
trade unions, fraternal organizations and small mutual groups 
with only the semblance of organization, where sometimes the 
only plan being to "pass the hat" in case of special distress of 
a member. A statement in detail of the Commission's findings 
as to present sickness insurance agencies will be found in 
Appendix A. 

To the Commission the most important conclusion reached 
from the examination of these plans is that there exists already 
in the Commonwealth a very general appreciation of the value 
of the insurance principle as a protection against the economic 
results of illness. There are numerous attempts among wage 
earners to apply the principle in various insurance plans. The 
results, however, fall very far short of the ideal. The Commis- 
sion was unable to find just how many wage earners were 
insured. Although insurance plans are numerous, it is sat- 
isfied that the number of wage earners insured against illness 
is far less than the total number. It is apparent, too, that the 
uninsured class includes the highest proportion of the thriftless 
and of those of very small means. An examination of the plans 
of insurance reveals, further, very few that make adequate 
provision for the economic stress occasioned by the combined 
effect of unemployment and the sickness which causes it. 



Amount of Sickness; 

As to the amount of sickness now existing among wage 
earners in Massachusetts the Commission has no definite 
statistics. 

The most important recent study of conditions in any part 
of Massachusetts is that made under the direction of L. K. 
Frankel and Louis I. Dublin for the Metropolitan Life Insur- 
ance Company. This was a survey of sickness in Boston during 
the two weeks beginning July 17 and July 24, 1916, and was 
a canvas of about 13 per cent, of the population of Greater 
Boston. The survey disclosed 19.6 persons sick in each 1,000 
persons canvassed. This rate is distinctly lower than that 
disclosed by the surveys made by the " same persons in other 



1917.] HOUSE — No. 1850. 19 

cities outside of Massachusetts. Part of the favorable result 
may be due to the season chosen for the survey. Yet, even 
assuming that the average experience for the year is no worse 
than that indicated by the survey, it means that each individual 
suffered 7.15 days of illness during the year. This, of course, 
is not the figure for employed persons. The report states that 
sickness involving disability for work was 18.1 per 1,000 in the 
case of males, and that the same rate was observed for females. 
It may be noted that this result is contrary to the usual ex- 
perience, which shows a higher sickness rate among women 
than among men. This would mean for each person in a 
year 6.6 days involving disability for work. The rates for 
sickness involving disability for work increased regularly with 
age for both sexes. 

As to duration of illness up to date of the inquiry, the report 
states that 26.3 per cent, reported durations of illness less 
than one month, 39.11 per cent, were reported sick for less 
than three months and 48.4 per cent, showed a sickness period 
of less than six months. 

For present purposes it is unnecessary to go further into the 
details of this report. The report shows that even though the 
condition of Boston may be somewhat better than that of 
certain other cities of the country, there still exists a large 
amount of sickness involving financial loss and suffering, and 
this loss is very unevenly distributed, pressing especially hard 
in many cases on account of the uncertainty of the incidence 
and the duration of illness. 

A study made by the Instructive District Nursing Associa- 
tion of Boston, the results of which were presented to this 
Commission, gave valuable evidence as to present medical care 
among the very poor. All patients under care of the associa- 
tion on Sept. 27, 1916, were studied. There were 1,038 cases. 
It appeared that 9| per cent, of the families had no medical 
care preceding the visit of the district nurse, although all were, 
in the opinion of the visiting nurse, in need of medical care. 
The proportion not having had medical care increases as the 
income decreases, being 7 per cent, for the highest and 13 per 
cent, for the lowest income group. In the outlying districts, 
where hospitals and dispensaries are not so numerous or acces- 



20 SOCIAL INSURANCE. [Feb. 

sible as in the central part of the city, the proportion of fam- 
ilies without prior medical care, was- larger. In that part of 
Boston known as Forest Hills, of the families with incomes of 
less than $12 a week nearly 50 per cent, had had no prior 
medical care, while in families of the same income in the North 
and West Ends, barely 1 per cent, had had no medical care. 

The conclusion drawn by the nursing association, which we 
adopt as sound, is that even in the city of Boston, in the out- 
lying sections, families do not receive the medical care which 
they need in many cases, chiefly for the reason that they do 
not feel they can afford it. Many who do receive medical 
care receive it later than they should. The association reports 
that in the central part of the city most of the families investi- 
gated were dependent upon medical charity for which the 
physicians treating them receive no compensation. 

These reports and other evidence given before the Com- 
mission confirm the prevailing impression of those acquainted 
with conditions that there exists a large amount of suffering 
from poverty and illness in this Commonwealth, and that even 
in a district as well supplied with medical and hospital facil- 
ities as Boston, competent medical service actually fails to 
reach a substantial portion of the very poor. These facts point 
to the need of a better organization of medical service, includ- 
ing an extension of the present system of hospitals and dis- 
pensaries. In the opinion of several of the Commission these 
facts also point to the need of a system of health insurance for 
the purpose of better meeting the financial burdens of sickness, 
a system which if adopted at all must be so related to our 
medical and hospital service as to improve rather than injure 
that service. 

For convenience in studying this problem there are presented 
in Appendix A, page 149, drafts of health insurance bills sub- 
mitted to this Commission. 

In Appendix A, page 174, the Commission also submits a 
statement relative to the cost of sickness among wage earners 
in the Commonwealth. The total yearly cost of sickness to 
the employees in Massachusetts is estimated at $38,770,167, or 
an average of $25.70 per person each year. These estimates 



1917.] HOUSE — No. 1850. 21 

are based on an investigation conducted by the Commission 
among the labor unions in the State. 

From the answers received in connection with the investi- 
gation as to the amount of insurance carried by workers, an 
estimate of the cost of accidents to wage earners who were 
members of the unions investigated was also made. These 
may be found in Appendix A, page 177. 

For services in connection with both these investigations the 
Commission is indebted to Paul H. Means and A. E. O. 
Munsell, members of classes in economics under R. F. Foerster, 
I assistant professor of social ethics, Harvard University. 

FRANK S. FARNSWORTH. 
ALLISON G. CATHERON. 
EDEN K. BOWSER. 
HARRY C. WOODILL. 
EDWARD G. MORRIS. 
JOHN P. MEADE. 
EDNA LAWRENCE SPENCER. 
WENDELL P. THORE. 



22 SOCIAL INSURANCE. [Feb. 



REPORTS ON HEALTH INSURANCE. 



STATEMENT OF ALLISON G. CATHERON, EDEN K BOWSER, 
• FRANK S. FARNSWORTH AND HARRY C. WOODILL. 

The undersigned members of the Commission believe that 
as soon as there has been adequate consideration of the details 
of legislation the Commonwealth should adopt a general system 
of health insurance for wage earners supported by enforced 
contributions from employers, employees and the State, and 
that such legislation is likely to prove of the greatest value in 
relieving distress and promoting the general welfare. 

We therefore submit a statement for the purpose of indicat- 
ing briefly the need of health insurance, and some of the prin- 
ciples which in our opinion should be adopted in any health 
insurance plan. 

We are satisfied from evidence presented to the Commission, 
and from our own independent observation, that the suffering 
from sickness is particularly great among those of small means. 
With the wage earner ill there is the combined effect of loss 
of income and increased expense occasioned by the illness. 
Frequently, this combination makes it necessary for the family 
to appeal to charity. Various studies of families known to 
charitable organizations have shown, according to testimony 
given before our Commission, that in from one-third to three- 
quarters of all these cases illness of some one in the family 
contributed to the economic breakdown. 

The suffering from illness directly can be lessened by a 
higher development and better organization of medical and 
hospital care, and by the multiplication of hospitals and dis- 
pensaries. In our opinion, however, while poverty exists as it 
does among large numbers of our industrial population, and 
as it is likely to exist in at least the immediate future, no mere 
development of medical facilities and organization will go to 



1917.] HOUSE — No. 1850. 23 

the heart of the problem. The only remedy which does so — 
short of abolishing poverty altogether, a problem discussed 
earlier in the report and not likely to find immediate solution 
— is one which distributes the burdens of illness so generally 
that they may be easily borne, taking into account that those 
responsible for illness or enjoying the benefit of its prevention 
should bear some share in its cost. No new device is needed 
for this purpose. The principle of insurance has been generally 
recognized as adapted for just such a situation, — a situation 
where loss is certain to fall on many members of a group, but 
where the incidence of that loss, and the extent to which it 
will fall on individual members, is uncertain. 

The existence of numerous voluntary plans of insurance 
shows a general belief in this principle. Even industrial insur- 
ance private corporations furnishing only a small death benefit, 
hardly more than enough for burial, and with the high premium 
rates required by the expenses of weekly collections has been 
deemed of such value by the wage earners of the Common- 
wealth that in the last insurance year they paid in premiums 
the sum of $12,251,000, though the losses paid were only 
S4,094,000. 1 

Voluntary Insurance or Compulsory Insurance. 

Voluntary insurance has never reached all the people who 
need it. Those who fail to take it need it most. They are 
the thriftless and the persons of smallest means. The only 
way to secure anything like the universal application of the 
insurance principle needed for its greatest efficiency is by mak- 
ing the plan compulsory. Such has been the experience abroad. 
All of these countries which have adopted compulsory health 
insurance have had preceding it a high development of vol- 
untary sickness insurance, some of them to a much greater 
extent than exists in Massachusetts. 

It is natural to oppose any compulsory plan on the ground 
that it is an un-American infringement of the principle of 
personal liberty. We submit that it has never been found 
un-American to adopt compulsion for the performance of any 

1 These figures are furnished by the Insurance Commissioner. 



24 SOCIAL INSURANCE. [Feb. 

obligation clearly and generally recognized. Free and com- 
pulsory education is a fair example. Every male citizen of 
Massachusetts between certain ages is by law a member of its 
militia and subject to military duty when required. Let it 
once be recognized clearly that every citizen has a duty to 
prepare himself to meet the hazards of life, such as sickness, 
unemployment and dependent old age, and there will be no 
difficulty about the acceptance of the principle of compulsion 
to enforce any plan deemed effective, particularly when the 
State lends its assistance to the plan. We believe that such 
a duty of preparation rests upon every citizen. If he fails to 
make such provision the social structure suffers, and if his 
failure is complete the State suports him. In theory, then, all 
citizens should be compelled to make such provision. But it 
may be assumed that those of a sufficiently high income have 
an adequate surplus to meet these hazards, and compulsory 
insurance plans generally exempt such. It -may be that such 
persons should be included ultimately, but it is more convenient 
to exempt them at the outset. As a practical matter, it has 
been found difficult to devise a system compulsory upon any 
but wage earners employed with some regularity. The reason 
for this limitation is that deduction from wages offers the most 
convenient means of collecting premiums. It may be that 
some practical compulsory plan of wider scope can be devised. 
None has been adopted in any foreign country, and none has 
been brought to the attention of this Commission. In our 
opinion the plan of widest application practicable at present 
is one which shall include all wage earners employed with 
some regularity and earning less than a given wage. We are 
satisfied that it is wise to include those who earn less than 
$100 a month. There should be opportunity for any one to 
enter the plan voluntarily. 

DlSTKIBUTION OF COST. 

On the important question of distributing the cost of insur- 
ance, we are impressed with the soundness of the arguments of 
those who urge that the cost should be shared by employer, 
employee and the State. Each is to a degree responsible for 



1917.] HOUSE — No. 1850. 25 

sickness. This statement will be readily admitted as to the 
worker himself, who can exercise a great degree of control over 
his individual health. But he is unable to determine alto- 
gether the conditions of his housing, food, drink or labor. 
These are among the conditions under the control in some 
degree of the State. The State has recognized its responsibility 
for the public health by a great mass of legislation altogether 
too large to make detailed reference to here. The employer's 
responsibility is not quite so clear, but we are satisfied that it 
exists. Some employers urge that their responsibility does not 
extend beyond occupational diseases, — a responsibility which 
is already recognized in the workmen's compensation law. It 
should be recognized, however, that there are many cases of 
disease which in the mass may be found to be due to occupa- 
tion, while in the particular case it may be impossible to trace 
the causation. Further, it is evident that the employer and 
not the employee determines the working conditions as to 
light, air, dust and other matters affecting health. 

If an employer has indeed conformed to the best present- 
day knowledge in establishing healthful conditions in his plant, 
it may be that he should not in such a particular case be 
charged with further responsibility for disease. Such a case, 
however, at present is exceptional, and does not represent the 
general conditions which should determine the principles of a 
proposed law. It should also be realized that even in such an 
ideal case the employer will receive the benefit of the improve- 
ment in conditions among his workers, which in our opinion 
will result from the adoption of a plan of health insurance. 
It is probably an impossible task to apportion the cost pre- 
cisely among employer, employee and State according to re- 
sponsibility. Other considerations will help our decision. The 
plan of insurance most likely in our opinion to prove successful 
is one in which the carriers are local mutual associations man- 
aged by employers and employees equally. If they are to have 
equal voice in the management of these associations they should 
make equal contributions to the cost of carrying the insurance. 

The proposal that the cost be distributed in the proportions 
of two-fifths for the employer, two-fifths for the employee and 
one-fifth for the State seems to us a reasonable one. 



26 SOCIAL INSURANCE. [Feb. 

Carriers. 

We have already indicated that in our opinion the normal 
carrier of insurance under any health insurance plan should be 
a local mutual association of employers and employees. The 
reasons for this conclusion are that such a plan is more econom- 
ical in administration than where the membership is scattered; 
that it lends itself readily to the proper organization of medical 
treatment through contracts with local doctors or groups of doc- 
tors; that it focuses attention sharply on the sickness experi- 
ence of a particular locality; and that it unites the forces 
which may most readily improve the health conditions of that 
particular locality. 

Provision should be made for trade associations in larger cen- 
ters of population. It would seem wise, also, to include present 
establishment funds and fraternal and trade unions which meet 
certain required standards of insurance, but such organizations 
do not possess the advantages of the local or trade associations, 
and their development as insurance carriers in our opinion 
should not be encouraged by the provision of the act. 

We think there are sufficient reasons for excluding private 
stock companies operating for profit from this field of insurance. 
The element of competition, entailing many agents, increases 
the cost substantially. It certainly does not seem just that the 
State should make any contribution to a system including this 
increased cost, nor should it require the employer to make such 
contribution. 

Benefits. 

The benefits which any health insurance plan should give are 
of two kinds, — financial and medical. The financial benefit 
should be large enough to meet much of the special economic 
stress caused by sickness and loss of wages, yet not large enough 
to encourage malingering. We believe that two-thirds the 
amount of wages as adopted in the bill printed in Appendix A 
is reasonable. 

Th£ medical benefits should include medical and surgical care, 
nursing, medicines, appliances and hospital care if necessary. 
Medical benefits should extend to members of the worker's 
family. Any health insurance plan should in our opinion in- 



1917.] HOUSE — No. 1850. 27 

elude a system of maternity insurance, with cash benefits pay- 
able to the wives of employed men as well as to insured em- 
ployed women. There should also be a small funeral benefit in 
case of death. 

Medical Administration. 

The most difficult questions which arise under the act are 
those concerning the relation of the medical profession to its 
administration. No entirely satisfactory solution of these prob- 
lems has been offered. 

It is important, in working out any plan affecting so vitally 
and so generally public health and the conditions of medical 
practice, to have the advice and co-operation of the medical 
profession. It is not likely that any plan which makes the con- 
ditions of medical practice less attractive will in the long run 
serve the public welfare; yet the advantages to be gained from 
a system of health insurance seem to us so great that every 
attempt should be made to secure a proper adaptation of medi- 
cal practice to it, though the adaptation may be difficult to 
secure. 

The fear that the medical profession may be financially worse 
off by reason of a health insurance act seems to us unfounded. 
All medical practice under the act will then be paid for, whereas 
at present very much is never paid for. There is no doubt that 
the total amount of money available for medical treatment will 
be larger because of the fact that it is easier for a wage-earner 
to make many small payments than to pay a single large sum, 
and further, by reason of the fact that the State and the em- 
ployer, as well as the worker, make contr butions. 

In order that the best medical advice may be available for 
the solution of health and medical administration problems 
arising under the act, there should be provision for medical men 
upon the Commission as administrative supervisors of the act or 
as an advisory medical committee. We are not satisfied that 
we know just how this plan should be worked out, nor are we 
satisfied that the problem of the relation of the Department of 
Public Health to the administrative machinery has been solved. 

There are, however, a few principles which in our opinion 
should be observed in any scheme of medical administration. 



28 SOCIAL INSURANCE. [Feb. 

First — There should be on the part of the insured a reason- 
ably free choice of physicians, and if the insured desires to have 
no physician he should not be compelled to accept one under 
the act. In so far as he may thereby endanger the public 
health there is adequate law now to meet the situation. If the 
situation is one which does not endanger the public health, we 
do not believe there is warrant for infringing upon his right of 
personal liberty by compelling the insured to accept a physician 
to whom personally or to whose system of medicine he has 
great objection. The individual who refuses medical treatment 
still receives financial benefits under the act greater than his 
own contributions would support, so that he has no excuse for 
demanding that he be exempt entirely from the system. 

Second. — All physicians of whatever school, licensed to prac- 
tice by law, should be allowed to elect to practice under the act. 
There should be some means of removing physicians from prac- 
tice under the act for sufficient cause. 

Third. — Physicians practicing under the act should be em- 
ployed by the carrier. We are not satisfied as to just which 
form of contract with physicians for payment is best, or whether 
any one form of contract is best in all situations. It therefore 
seems to us better not to prescribe the form of contract in the 
act, but to leave carriers to make such contracts subject to ap- 
proval of the commission administering the act. 

Fourth. — It is evident that we should not make the mistake 
of allowing the physician in attendance on the insured or his 
family to determine when cash benefits shall begin and termi- 
nate. He would then be exposed to the temptation to benefit his 
practice at the expense of the fund. There must therefore be in 
addition to the attending physician, whose first duty is to his 
patient, a supervising physician employed by the carrier. The 
function of this supervising physician should be to see that 
proper treatment is given in all cases by the attending physi- 
cian, and that the fund does not suffer from malingering. In 
case of disagreement as to benefits or remuneration there must 
be some adequate plan for decision and review if necessary. 



1917.] HOUSE — No. 1850. 29 

Relation to Workmen's Compensation. 
It is essential to provide in any health insurance law in this 
Commonwealth that the present workmen's compensation act 
shall not be confused by the new system of health insurance. 
The worker who is incapacitated by reason of accident in indus- 
try should receive compensation, and if there be doubt as to 
whether his incapacity is due to industrial accident or disease, 
the right to apply for compensation should in no way be abro- 
gated by the health insurance law. If he were incapacitated by 
disease which was not purely the result of industrial accident he 
would receive medical care in any event upon the first day of 
illness. Whether he would receive benefits under compensation 
or under health insurance would depend on the termination and 
the character of the incapacity and its cause. The main point 
is that all the present rights of the employee to compensation 
should be preserved in full, and not diminished, by the health 
insurance system. The proposed law, printe.d in Appendix A, 
page 149, to this report, specifically so provides. 

Medical Examination of Workers. 

Health insurance does not require medical examination previ- 
ous to admission to insurance. This is one of the advantages of 
a compulsory system. Nor does the scheme require medical 
examination annually. In fact, it calls for no medical examina- 
tion except by the doctor who treats the insured person when 
he is sick, and by the supervising physician, who certifies that 
he is entitled to sick benefit. The insured person and his 
family is guaranteed the right to choose his physician, under 
the proposed law, and cannot be required to accept a doctor 
whom he does not want. 

Certain persons have objected to the bill on the ground that 
it might result in a requirement by employers of a medical 
examination previous to employment, or at periodical intervals 
after entering employment. Employees have feared that men 
with defects would be excluded, without provisions being made 
for them, or that minor physical defects would be made an 
excuse for discharging a man who was objectionable for other 
reasons. 



30 SOCIAL INSURANCE. [Feb. 

Health insurance as proposed would not prevent an employer 
from doing what he can do to-day, but he could not enforce a 
physical examination of his employees under the health insur- 
ance system. He would have to do it, if at all, outside the sys- 
tem and pay for it extra. The proposed health insurance law 
leaves the rights and powers of employer and employee exactly 
where they are to-day. Labor would lose no legal safeguard. 
Furthermore, as the local and other insurance funds would be 
administered by boards on which employer and employee have 
equal representation, the practical effect of health insurance 
would be to bring about team-play rather than opposition in 
caring for the health of the workers in industry. Such has cer- 
tainly been the result in Germany, as the Committee of the 
British Trade Union Congress testified before union labor in a 
report of 1911, after a careful study of the continental system. 



Cost. 

The cost of a system of compulsory health insurance depends 
on the number of persons affected, the nature and extent of the 
benefits offered, the scale of wages which the insured persons 
received, and the cost of the services and the materials to be 
provided in the benefit. Thus in a community where wages' are 
low the benefit paid on the basis of a percentage of wages will 
cost less. Where medical services are provided, and the usual 
schedule of physician's fees are high, the cost will be higher 
than in a community with a lower average fee schedule. 

In Massachusetts the proposed health insurance bill would 
probably include about a million persons. An estimate has been 
prepared by the Bureau of Statistics of the Commonwealth 
showing that there are about 1,500,000 persons engaged in gain- 
ful occupations. In this estimate no deduction has been made 
for the classes of persons who would be exempt from insurance 
under the proposed law. These persons would number, accord- 
ing to an estimate made by the Bureau of Statistics, 468,262. 
Assuming the conditions laid down in the bill printed in 
Appendix A, there would be about 1,168,959 persons subject to 
the act. 

In computing cost it is necessary to estimate separately a 



1917.] HOUSE — No. 1850. 31 

considerable number of items, not less than twelve, in order to 
ascertain the cost of the proposed bill. Among these items are 
the following: cash benefit to the insured person of two-thirds 
of the wage; hospital cash benefits of one-half the wage (paid 
to the family of the insured while he is in a hospital); medical 
care for the insured person; medical care for his dependents; 
maternity cash benefits; maternity medical care; hospital care 
of insured persons; hospital care for dependents; specialists' 
services; dental services; drugs and appliances; funeral bene- 
fits; and administration. Only a thorough study of the preva- 
lence of sickness and the cost elements involved in each of these 
benefits would give a statistical basis or estimate of the cost of 
health insurance in Massachusetts. 

It may be pointed out here that it is usual to compute the 
cost of the system on the basis of a percentage of the wages of 
the insured persons. This is done for the reason that cash bene- 
fits are paid on the basis of a percentage of wages, and the con- 
tributions also are often calculated on a similar basis. No 
other method of expressing the cost gives as clear an idea of 
its relative importance in comparison with the size of the 
problem. 

We have already a good deal of information bearing on the 
question of cost. The experience abroad (statistics are avail- 
able for a period of over thirty years in Germany, and shorter 
periods in nine other countries) shows that it can safely be said 
that the cost of a health insurance system along the same gen- 
eral lines now proposed in this Commonwealth would be be- 
tween 2| and 4j per cent, of the wage. These are the limits 
between which the cost has varied abroad. It must also be said 
that the upper limit is rarely reached, and only in a few of the 
local funds in Germany, where the funds have of their own voli- 
tion given higher benefits than those required by law. Ordi- 
narily the cost runs from about 3 to 3j per cent, of the pay 
roll. 

There has just been concluded the first study of the cost of 
the health insurance system in the United States, made by the 
California Commission on Social Insurance, with Dr. 1/ M. 
Rubinow as its consulting actuary. As a result of a six months' 
study on the basis of benefits almost exactly the same as those 



32 SOCIAL INSURANCE. [Feb. 

proposed in the present bill, now before the Massachusetts 
Legislature, Dr. Rubinow reached the conclusion that the cost to 
California would be 3J per cent, of wages. It must be borne in 
mind that in California the average wage is SI 8, whereas in 
Massachusetts the average wage is about $12.50. The medical 
fee schedules in California are also about 50 per cent, higher on 
an average than those prevalent in Massachusetts. Most of 
these elements would tend to increase cost there. The fact that 
the California study was based on a statistical investigation, 
in no way affected, of course, by the experience abroad, yet 
with a result so closely in correspondence with the foreign ex- 
perience, lends much weight to the figure obtained. 

At a public address in Boston on January 9, when Dr. Rubi- 
now was questioned as to this problem of cost, and the value of 
making an investigation in Massachusetts similar to that made 
in California, he responded as follows : — 

Investigations that elicit facts are always desirable if properly made; 
but the value of an investigation of the cost of a health insurance sys- 
tem in Massachusetts would be to tell you whether your cost would be 
3fo per cent, of wages, or 3i 7 o per cent, or 4tV per cent. You may be 
sure in advance that your cost will be between 3 and 4| per cent., 
probably about 3£ per cent. 

With this percentage of wages and the figures as to persons 
covered by the proposed act quoted above from the Bureau of 
Statistics, as a basis, the cost of a system of health insurance in 
Massachusetts may be estimated at approximately $23,000,000. 

This cost does not mean the real or net cost, as to which 
something should be said. At the present time the community 
is already bearing the cost of caring for sickness and for the de- 
pendency resulting from sickness. It is also bearing the cost of 
a vast number of organizations supplying sickness insurance, 
many of them furnishing slight benefits. The bill now intro- 
duced provides that the distribution shall be 40 per cent, to the 
employer, 40 per cent, to the employee and 20 per cent, to the 
Commonwealth. The employee is now paying in one way and 
another at least as much as the proposed system would cost 
him. He is probably paying indirectly at least double what the 
the proposed system would cost him in contributions. A man 



1917.] HOUSE — No. 1850. 33 

earning $18 a week would probably pay about lj per cent, of 
his wages, 27 cents a week, as his contribution. It is known 
that the present contributions of wage earners for ndustrial in- 
surance (chiefly burial insurance) run usually as high, and very 
often much higher, than this, even among those of smallest 
means. A study made by Mrs. Elizabeth F. Moloney of the 
State Board of Charity, of 500 families aided under the act for 
the aid of mothers with dependent children, showed that the 
average amount of insurance premiums paid by each family 
was 54 cents per week. Some of these families were carrying 
both industrial and fraternal insurance. 

Of the $12,251,000 paid for industrial insurance in Massachu- 
setts in 1915 by wage earners, about $8,000,000 did not come 
back in benefits. While some of this burial insurance is for 
children, and might be continued under the proposed health in- 
surance, a considerable part of this would be met by the funeral 
benefit under the proposed law. The wage earner is also meet- 
ing to-day the entire expense of his medical treatment, except 
so far as provided by charity, and he is struggling along as best 
he and his family can under the burden brought by sickness 
when his wages stop. From a financial standpoint the em- 
ployee will gain instead of lose, both directly and indirectly, by 
the proposed system. 

How about the employer? The employer will gain in two 
ways: first, he is at the present time meeting considerable ex- 
penses for various services to his employees when they are sick; 
paying the wages of a valued employee for a week while ill is 
common in the case of regular employees who have been in a 
business for a long time, and many establishments also have a 
form of sick benefit to which the employer, in some cases, con- 
tributes. A growing number of large establishments provide 
some form of medical supervision, examination, or, in some in- 
stances, medical care, and some establishments have elaborate 
hospital and dispensary plants with salaried physicians. The 
cost of all this would be deducted by such employers, as it 
would be borne by the health insurance system. The second 
way n which the employer is likely to gain is through the in- 
creased efficiency of his employees. A considerable portion of sick- 
ness, which now causes loss of time and requires the employer 



34 SOCIAL INSURANCE. [Feb. 

to substitute a new man and train him temporarily, would be 
diminished by better medical care and by the absence of worry, 
which is now one of the large contributing factors in diminishing 
the working efficiency of men with families. Health insurance 
would contribute directly to diminishing broken time by dimin- 
ishing sickness. It would also contribute directly to efficiency 
by keeping the worker in better trim, and would lessen the 
shifting of workers. It has been estimated that it costs on the 
average $45 in manufacturing industries to get a new worker 
and train him to the job. 

Of the estimated cost of $23,000,000 the share of the Com- 
monwealth under the proposed plan would be $4,600,000. But 
there are certain large items of expense which the Common- 
wealth and cities and towns are now bearing from which they 
would be relieved if a health insurance plan were in operation. 
The following estimate of such savings made after a confer- 
ence with Mr. Robert W. Kelso, secretary of the State Board 
of Charities, and bearing his approval as on the whole a reason- 
able estimate, is presented. The estimate is made by deducting 
from present public expenses on account of sickness the prob- 
able amount due to the care of persons who would be exempt 
under the bill, and the probable expense of chronic cases 
extending beyond the twenty-six weeks allowable under the 
bill. The items include certain reimbursements by the Com- 
monwealth to municipalities on account of the mother's aid 
act, in so far as that aid is due to sickness, reimbursement for 
the care of sick poor having a State settlement, reimburse- 
ment for local care of dangerous diseases, part of the expenses 
of the State Infirmary, part of the maintenance cost of tuber- 
culosis hospitals borne by the Commonwealth, and subsidies by 
the Commonwealth for the care of tuberculosis in municipal- 
ities. The estimate of saving which a health insurance bill 
would make to the Commonwealth on account of these items 
is $850,000. 

Certain savings by municipalities should also be considered. 
The statist r cs of 33 cities and 320 towns of the Common- 
wealth show an expenditure of approximately $2,600,000 for 
the following items : — 



1917.] HOUSE — No. 1850. 35 

Contagious-disease hospitals and quarantine, .... $293,000 

Tuberculosis, . ' 499,000 

Municipal hospitals, 989,000 

Subsidies to other hospitals, 29,000 

Health and sanitation in towns, 865,000 

$2,675,000 

We submit that it is a reasonable estimate that one-half 
of this total, or $1,300,000 now expended by cities and towns, 
would be met by insurance funds under the proposed act. 
While this is not a saving for the State, it is an important 
public saving. Finally, there is an annual expenditure of 
slightly more than $3,000,000 by the overseers of the poor in 
the Commonwealth as a whole for relief outside of institutions. 
A large proportion of this relief is on account of illness. Many 
studies of charitable work make the proportion more than 
50 per cent. It does not therefore seem unreasonable to esti- 
mate that $1,000,000 now expended for relief by the overseers 
of the poor would be met by insurance funds under the pro- 
posed law. 

The reports of the State Board of Charities show that the 
incorporated charitable institutions of Massachusetts expend 
about $12,000,000 a year. About $4,800,000 come from annual 
contributions, dues or entertainments. Somewhat more than 
half of the $12,000,000 goes to hospitals, dispensaries and 
other institutions giving charitable medical care to the sick. 
Of the remaining proportion of the $12,000,000, a considerable 
part is for charitable relief of dependent persons who have 
been brought to require assistance because of the sickness of a 
wage earner. Altogether, it is certain that at least half of the 
total expenditure is for purposes of caring for sickness under 
conditions which would be met wholly, or in large part, by the 
proposed health insurance. This by no means implies that the 
proposed law would obviate the necessity for such medical 
institutions. It would, however, render unnecessary part of 
the contributions to them, and would enable their resources 
to be used without, in many instances, requiring the acceptance 
of charity on the part of those benefiting by them; similarly 
with those contributions for relief in homes where relief has 
been caused by sickness. 



36 SOCIAL INSURANCE. [Feb. 

A very large amount of money is annually given privately 
and without record by individuals to aid persons who are sick 
or whose families are dependent because of sickness. Almost 
all of the contributions of this kind, as well as the contribu- 
tions received by the incorporated charitable societies, come 
from the employing classes. It is not too much to say that 
several millions of dollars now annually given by these classes 
would not need to be given for the same purposes if the health 
insurance law were in force. This would mean in a measure 
that the employing classes, who wou'd have to contribute 
two-fifths of the expense of the proposed bill, would find relief 
to a not inconsiderable amount in another direction. 

We do not submit these figures for the purpose of making 
any close estimate of the net cost of a health insurance bill, 
but rather for the purpose of showing clearly that in consider- 
ing the gross estimate, whether it be $23,000,000 or some other 
figure, we should have in mind the very substantial savings — 
many millions certainly — which would be made in expenses 
now being borne by employers, employees and the public. 
We are satisfied that adequate medical treatment during ill- 
ness, and reimbursement of a substantial portion of wages 
lost on account of illness, is worth all it will cost. If the wage 
earners of the Commonwealth can pay over $12,000,000 a 
year, chiefly for the expensive funerals which the $4,000,000 
returned to them by industrial insurance provides, even a 
much larger cost than $23,000,000 for the proposed plan of 
health insurance would appear to be justified if necessary. 

It is well, also, not to forget that a change in the distribu- 
tion of the cost between the employer, the employee and the 
Commonwealth might be made so that the contribution of the 
Commonwealth might be reduced, if it seemed better to throw 
a larger proportion upon the two industrial factors and not to 
increase so much the State tax. 

The benefits in the proposed health insurance law are liberal 
in comparison with those which are afforded abroad, although 
not more liberal than those which are afforded in some of the 
systems abroad. It is possible to reduce the cost substantially 
by two methods. First, by limiting the number of persons 
included in the compulsory system. Thus, for instance, agri- 



1917.] HOUSE — No. 1850. 37 

cultural labor and domestic service might be excluded, and 
systems abroad have often begun with such exclusions. Again, 
the income limit to persons might be altered. There might 
be reductions made in the charge of the medical benefits pro- 
vided, etc. It would not be desirable to diminish the benefits 
to such a point that they would not yield substantial returns. 
An experimental start should be such as will give a real result. 
There are a number of other questions which must be deter- 
mined before the adoption of any system of health insurance. 
Most of these questions relate to details of administration, 
some of them very important details. This commission in the 
time at its disposal, for the consideration of a subject which is 
as yet very new to the citizens of this Commonwealth, has not 
been able to reach conclusions as to all matters of adminis- 
tration which it is satisfied will endure the test of experience. 

In general, the scheme of administration worked out in the 
bill printed in Appendix A, page 149, seems likely to be suc- 
cessful. Further study and discussion will perhaps show the 
necessity of modifying the plan in some respects. We are 
satisfied, however, that some plan for health insurance should 
be adopted as an important early step in the interests of social 
welfare. 

FRANK S. FARNSWORTH. 

ALLISON G. CATHERON. 

EDEN K. BOWSER. 

HARRY C. WOODILL. 

I find myself in accord with my associate members in their 
recommendations in the foregoing statement, with the single 
exception that I desire to note here that, inasmuch as the cost 
of the proposition of a compulsory system of health insurance 
for the Commonwealth has been variously estimated at from 
$4,000,000 to $27,000,000, I feel I cannot join with the other 
members in their recommendations as to the distribution of 
the cost of any such system until more accurate information 
is available based on Massachusetts statistics. 

HARRY C. WOODILL. 



38 SOCIAL INSURANCE. [Feb. 



STATEMENT OF JOHN P. MEADE AND EDWARD G. MORRIS. 

Universal health insurance aims to conserve the physical and 
economic welfare of the wage earner, the family and the State. 
The loss to the individual in wages and efficiency, because of 
sickness and impaired health, is of an appalling character. 
The existence of poverty in the home and effect of ill-health 
upon the well-being of the working people of the Common- 
wealth are well known. Sickness among .the working people 
of Massachusetts is the cause of more dependency than indus- 
trial injury arising out of and in the course of their employ- 
ment. The family dependent upon the income of the average 
laborer is heavily burdened when sickness enters the home. 
The economic loss resulting from .interrupted wage-earning 
capacity is a menace to the proper development of family life. 
It is frequently manifest in the most acute poverty and lack 
of adequate nourishment and care. 

Wage earners with a small income are unable to meet the 
expense incidental to medical care during long periods of ill- 
ness. Investigations made in this Commonwealth have proven 
that this condition is true in the case of thousands of working 
men who have been treated in hospitals and dispensaries. 
Because of the inability of large groups of wage earners to 
secure at the regular cost the medical attention needed, hos- 
pitals and dispensaries have become numerous in the large 
centers of industrial population throughout the country. It is 
said that the number of these institutions have increased seven- 
fold in the last fifteen years. 

Among the wage-earning section of the population an exces- 
sively high infant death rate exists. The investigation con- 
ducted by the Children's Bureau of the United States Depart- 
ment of Labor in Johnstown, Pa., during 1915, showed that 
the infant mortality rate among those who lived in the poorest 
paid part of the community was five times greater than that 
of the more favorable sections of the community. A similar 
investigation in Montclair, N. J., showed the same result, — 
an increased infant mortality rate with a decreased family 
income. These facts point strongly to the inability of the 



1917.] HOUSE — No. 1850. 39 

poorly paid wage earner adequately to bear the burden of 
sickness in the family. 

That the working people of Massachusetts are keenly aware 
of the necessity of protecting themselves against conditions 
that undermine the stability of the home is evidenced by the 
fact that they paid over $12,000,000 in premiums for industrial 
insurance during the year 1915 in Massachusets. What is 
very significant in connection with this statement is the fact 
that they received but $4,000,000 in actual cash benefits in 
return. 

There is sufficient knowledge available to justify the opinion 
that the attitude of the State toward the problem should be 
one of careful inquiry. The conservation of health is essential 
to its progress and development. European Nations have made 
this principle a leading governmental function. The investi- 
gations of our Commission on the question of health insurance 
have convinced us that it now constitutes one of the leading 
world problems. 

In our own country it occupies a prominent place in public 
discussion. During the past year the Commission on Social 
Insurance in California has conducted an investigation as to 
the need of health insurance in that State, and will report to 
the Legislature during 1917. The subject is practically a new 
one for the United States. The adaptation of a system of com- 
pulsory health insurance to the economic conditions in Mas- 
sachusetts, whose industries are engaged in the keenest com- 
petition with other States of the Union, makes our problem 
entirely different from that of the European Nations. 

Compulsory systems of health insurance provide for contribu- 
tions by employers, employees and the State. Such a system 
enacted into Federal law would place all industries upon the 
same basis. The employers' contributions under such circum- 
stances could be made a uniform charge upon production, and 
their part in the plan of insurance made to spread over a na- 
tional area. With compulsory health insurance systems operat- 
ing in Massachusetts, and excluded from the other States of the 
Union, a condition would be created in our industrial life which 
would be distinctly harmful to some wage earners of the Com- 
monwealth. Employers would certainly add the cost of insur- 



40 SOCIAL INSURANCE. [Feb. 

ance contributions to the price of their product. The consumer 
would in the final analysis pay this portion of the expense. Can 
this cost be passed to the consumer without doing injury to the 
wages of our Massachusetts workmen, who are employed in the 
industries of this State which are a factor in Nation-wide 
competition? 

From the Bureau of Statistics we learn that 400,000 workers 
in the manufacturing industries of this Commonwealth receive 
an average annual income from their labor of 1675 each or less. 
This amount is not sufficient to maintain a family in reason- 
able and frugal comfort. The corner stone in the economic 
structure of the home is a living wage. Conditions in industry 
that would impair this vital principle should be guarded against. 
Employers, who because of their inability to meet the compe- 
tition of other States could not put all the cost of health insur- 
ance on the price of their product, would be very likely to 
adopt a policy that would have a detrimental effect upon wages. 
Some of the leading employers of the Commonwealth declare 
this danger to be a real one. 

Under such conditions large corporations contributing vast 
amounts of money to the insurance fund would declare it diffi- 
cult to compete with the product of other States where no sys- 
tem of compulsory health insurance existed. The first to feel 
the effect of this change would be the wage earner. The legiti- 
mate fruit of his toil and industry would be jeopardized. 
Especially is this true in those industries where no organized 
effort can express the point of view of the worker. In Germany 
the General Commission of Trade Unions, in a report issued in 
April, 1916, dealing with this feature of compulsory health in- 
surance, makes this significant statement : — 

What is to prevent the employers from, lowering wages by the amount 
of the insurance premiums they have to pay for their men? Only the 
trade unions can offer an effective resistance to this tendency; only the 
organization of the workers prevents the masters from casting the burden 
of their contributions on the shoulders of the workers themselves. 

It may be said that Massachusetts should be a pioneer in the 
work of health insurance, believing that, like the experience in 
workmen's compensation laws, legislation in this direction 



1917.] HOUSE — No. 1850. 41 

would spread rapidly to other States, and the competitive 
difficulty would soon disappear. As regards workmen's com- 
pensation, it is known that employers everywhere were insuring 
against the risks and hazards of industry prior to the adoption 
of this legislation, and the cost had become a fixed charge upon 
industry. 

The problem of transferring this cost to the consumer was not 
a new problem in the administration of the compensation laws. 
In many States the new legislation has made a reduction in the 
cost of accident insurance to the employer. New York, with its 
liberal act, is looked upon as a conspicuous example in this 
respect. It is true that some business concerns maintain certain 
features of health insurance in connection with the operation of 
their business in this Commonwealth. It cannot be said that 
they are in such proportion as to justify a comparison favorable 
to compulsory health insurance with conditions preceding the 
adoption of the workmen's compensation act. We hold the 
opinion that an effective system of sickness insurance can be 
successfully established only by Federal enactment or by an 
agreement between the States directly concerned with compet- 
itive industries. Unless such legislation was operative in other 
States, workmen leaving Massachusetts would be compelled to 
lose their equity in the insurance fund which their earnings 
helped to maintain. Industries have their low and high periods 
of production at different times in the year. Fluctuation in 
employment is an ordinary condition in manufacturing estab- 
lishments. The difference between the minimum and maximum 
working force employed throughout the State of Massachusetts 
in 1913 was over 185,000. These conditions cause a substantial 
number of workmen to accept employment and frequently es- 
tablish their residence in other States, as, for instance, in New 
Hampshire, where the shoe industry is a factor, and in Rhode 
Island, where the textile mills are numerous. Until the time 
arrives when we can safely consider an elaborate system of 
sickness insurance it would seem that the Commonwealth might 
consider to its advantage some extension of our present system 
of medical administration. Sickness and poverty, to a very 
large degree, bear the relationship of cause and effect. In fami- 
lies where the wage of the provider is small sickness leads the 



42 SOCIAL INSURANCE. [Feb. 

way to misery and misfortune. Some practical manner of treat- 
ing with cases where this condition prevails would constitute 
work of the most constructive type. One of the most effective 
features of the sickness insurance program is the plan of pro- 
viding surgical and medical treatment to the dependents of in- 
sured workmen. To organize a system that would place medi- 
cal treatment within the reach of wage earners whose income is 
such that the cost of adequate service is prohibitive would seem 
to be productive of much good. The need for such service in 
maternity cases is strongly apparent in the homes of working 
people. 

The problems involved in the establishment of a State sys- 
tem of health insurance should be well thought out by employ- 
ers and workmen. There should be some basis of agreement 
reached by these important factors in the industrial life of the 
Commonwealth before legislation of this character is adopted. 
The medical fraternity has officially requested the Commission 
to refrain from proposing legislation until further study of the 
problem has been made by the profession. 

With the aim and purpose of health insurance to conserve the 
health of the wage earner and his family there can be no differ- 
ence of opinion. Until the means by which this end may be 
attained are thoroughly understood, and public opinion is 
formed on the subject, no specific legislation should be 
recommended. 

JOHN P. MEADE. 

EDWARD G. MORRIS. 



1917.] HOUSE — No. 1850. 43 



STATEMENT OF WENDELL P. THORE AND EDNA L. 

SPENCER. 

We do not advocate immediate legislation for health insur- 
ance because this Commission has not had sufficient time to 
study the subject thoroughly. The California commission has 
spent several years on the problem and is still at work upon 
it. The need of some kind of health insurance has been amply 
proved, but before a law is enacted for such insurance the pub- 
lic and the doctors should be given time to inform themselves 
as to the value of it, so that they may give it their approval 
and co-operation. We strongly recommend further study of 
this system of insurance at once, so that necessary details for 
the operation of such a law, and especially those relating to 
its administration, may be determined. 

There are two propositions for the methods of conducting 
the administration of such health insurance: should it be of the 
compulsory contributory character, or of the compulsory non- 
contributory type? In the compulsory contributory idea there 
is the un-American feature of compelling our people to enter 
into a scheme with which they may not be in sympathy. In 
the compulsory non-contributory feature, by which the wage 
earner shall not be compelled to contribute, there will probably 
be opposition from the remaining two parties who would be 
asked to contribute to it, namely, the State and the employer. 
Under the compulsory contributory scheme, by which the 
State, the employer and the employee must contribute, the 
masses of our people, the employees and wage earners, will 
find objection for the reason that by direct and indirect tax- 
ation they would pay it all. 

The contributory system would place all the burden upon 
the workers, and it is fallacious to say that there would be 
three distinct contributions from the government, the em- 
ployer and the employee. Let us analyze this claim and see 
who pays. If the government pays, the people pay; if the 
employer pays, he will charge it to the cost of his products, 
such as clothing, shoes and other things, and the people, who 



44 SOCIAL INSURANCE. A [Feb. 

buy the products, pay again. Now comes the employee, who 
must contribute his part according to this scheme, and for the 
third time he pays. 

If there is to be a system of health insurance established 
we recommend either of the following methods : — 

1. The only contributors shall be the State and the employer. 

2. A non-contributory system. 

We make these suggestions because we believe the employee 
should not be compelled to contribute to any such system 
of compulsory contributory health insurance directly from his 
overtaxed pay envelope. 

In the hearings held by the Commission, numbers of mem- 
bers of the medical profession, as well as labor organizations, 
opposed the enactment of any such proposed law at this time. 
Labor organizations are also strongly opposed to the compul- 
sory contributory feature. 

With any health insurance scheme there ought also to be a 
system of unemployment insurance to protect the insured 
during long periods of unemployment from lapses. Health 
insurance and unemployment insurance were jointly enacted 
in England in 1911. 

The medical profession should be given every opportunity to 
study carefully all existing legislation of this character which 
so vitally affects them. It is absolutely necessary that they 
be in complete harmony with any proposed health insurance 
legislation. As for the people, they should thoroughly under- 
stand the proposition, and no law which tends to limit medical 
freedom should be allowed to reach the statute books. 

We recommend, as a beginning along the lines of health 
insurance, that legislation be enacted from which maternity 
benefits may be had, so that any child born in Massachusetts 
and its mother may have the necessary protection and care 
needed at such vital times. Maternity benefits, we believe, 
afford a positive and interesting opportunity for immeasurable 
good, and one that cannot fail to advance the well-being of our 
future citizens. 

We therefore recommend the following proposed maternity 
bill for enactment: — 



1917.1 HOUSE — No. 1850. 45 



An Act to protect Mothers and Children during the Maternity 
Period in the Commonwealth by Right of Citizenship, through 
the Establishment of a Maternity Board. 

Be it enacted, etc., as follows: 

Section 1. From and after the second day of January, nineteen 
hundred and eighteen, there shall be established a board for the admin- 
istration of maternity benefits. Said board shall be appointed by the 
governor and shall consist of three members to serve without pay, all of 
whom shall be women, and one of whom shall be designated by the gov- 
ernor to serve as chairman. One member must be a representative of 
labor, one a physician experienced in obstetrical work, and preferabty one 
who has practised among those who would be eligible to receive maternity 
benefits under this act, and one a recognized student of economics. One 
member shall be appointed for three years, one for four years, and on3 for 
five years. However, at the expiration of the time for which the first 
two members are appointed the governor shall appoint said members for 
the term of five years respectively. 

Section 2. Not later than one month previous to the date for all ap- 
pointments the governor shall hold a public hearing duly advertised, rela- 
tive to said appointments, at which he shall preside, and where discussion 
of names of those eligible for such appointments may be heard. The 
governor shall fill all expiring terms of office on said commission not later 
than one month after said term shall expire. 

Section 3. Said board shall have an office in the state house, and shall 
receive such money for general office expenses, clerical, travel and other- 
wise as shall be annually appropriated by the general court. 

Section 4. Any woman shall be deemed eligible under this act, who is 
about to become a mother or who has become a mother within two months, 
and whose income from whatever source is ten dollars a week or less, or 
whose husband is receiving ten dollars a week or less, or if the combined 
income of both husband and wife is ten dollars a week or less, and all other 
women whom it shall be determined, as hereinafter stated, are unable to 
provide the ordinary and proper care for themselves and infant during a 
period before and after childbirth. Any woman to be eligible under 
this act must have been a resident of the state for two consecutive 
years next previous to application for maternity benefits. 

Section 5. In case of wage workers, or the wives of wage workers, 
where satisfactory proof shall be offered that the wage of neither, nor the 
combined wage, or other income of both, is in excess of ten dollars a week, 
benefit shall be granted without further investigation. 

Section 6. An applicant for maternity benefits must apply, either 
through a clergyman or physician, to the mayor of the city or chairman 
of the board of selectmen of the town of which she is a resident. Such 



46 SOCIAL INSURANCE. [Feb. 

application shall be investigated and passed on by a city clerk or clerk 
of the board of selectmen. No employee or official of any private chari- 
table organization or poor relief department of a town or a city, or of the 
state board of charity, shall be used as an investigator to secure informa- 
tion relative to requests for maternity benefits. All applications shall be 
forwarded with recommendations to the board of administration of mater- 
nity benefits, whose recommendation shall be final, but any applicant who 
is denied maternity benefits shall be entitled to a hearing before the board, 
said hearing to be open if the applicant so desires. The financial necessity 
of the applicant shall be the only proposition upon which the board's 
decision shall be rendered. 

Section 7. It shall be unlawful to disclose the identity of a recipient 
of maternity benefits under this act, or to publish the proceed ngs in any 
such case unless the consent of the recipient is obtained, or unless such 
recipient shall have caused public statements to be issued relative to same. 
Violation of any provision of this section shall be punished by a fine of 
not less than thirty nor more than fifty dollars for each offence. 

Section 8. Maternity benefits may continue for a period of six weeks, 
and as much longer as shall, in the judgment of the board, be deemed neces- 
sary. Women eligible to maternity benefits under this act shall receive 
either hospital care or home nursing, or both; medicine and medical care; 
and such other obstetrical care as may be necessary, and a sum of money 
not less than ten dollars a month nor more than fifty dollars. 

Section 9. Such cases shall not be given to a city physician, unless by 
request of the patient, who shall be allowed in all cases to choose her own 
physician. The attending physician shall be paid at a rate, in so far as is 
feasible, commensurate with his or her usual fee for such cases. 

Section 10. No charitable organization shall furnish nurses under 
this act. 

Section 11. No woman receiving maternity benefits under this act 
shall be deemed a pauper or recipient of charity. 

Section 12. The commonwealth shall appropriate the sum of twenty- 
five thousand dollars for all benefits provided for under this act, and the 
maternity board shall make such regulations and prescribe such oaths as 
it shall deem necessary to protect the commonwealth in the payment of 
such benefits. 

Section 13. Upon the passage of this act permission shall be requested 
from the federal government to post copies of it in every post office in the 
commonwealth, and in addition, an outline of this act with a statement of 
the requirements for eligibility shall be published once each month in the 
leading papers of the state. 

Section 14. This act shall be liberally construed to carry out its pur- 
pose, namely, as an exercise of the police power of the state to preserve the 
health of the citizens, and forever to prevent the placing of the stigma 
of pauperism upon the holy state of motherhood. 



1917.] HOUSE — No. 1850. 47 

An- extension of our present methods of dealing with sick- 
ness in all its details should, we believe, first be taken up and 
thoroughly dealt with before the enactment of any complicated 
general health insurance law. Many physicians in the hearings 
before the Commission expressed the belief that the present 
methods of prevention and help should be extended to the 
utmost before any health insurance system is inaugurated. 
Some felt that if necessary funds could be obtained to do 
this work properly health insurance would be. found to be un- 
necessary. 

In European countries there is much discussion as to the 
value of health insurance. The results of its work in such 
places have not been entirely satisfactory, but this should not 
be construed to mean that some health insurance protection 
of the European type cannot be Americanized sufficiently to 
warrant its adoption here. 

We are heartily in favor of any equitable system that will 
minimize the costly hazards of sickness which destroy the 
happiness of our people, but we are not unmindful of the 
great expenses and the difficulties involved in the making and 
the working of such a protective law, and therefore believe 
that this question should be given much more consideration 
before the final steps are taken than w^e have been able to 
give it during our limited time. 

A special commission should spend at least a year upon 
this problem. Unfortunately, the conditions in such countries 
as England and Germany do not allow a very close study of 
the workings of this insurance legislation under normal con- 
ditions. We know, however, that the British Parliament has 
within the last year been considering changing the financial 
arrangements in relation to women insured under the act. If 
we could wait until the cessation of hostilities we would be 
able to get the benefit of the English experience with health 
insurance. 

The extension of the workmen's compensation act to cover 
the hazards of sickness and the prevention of it should be 
considered in connection with the further study of the health 
insurance problem, so as to ascertain if an extension of this 



48 SOCIAL INSURANCE. [Feb. 

system, properly changed and adapted, would not, to a large 
degree, take the place of health insurance. 

No problem that has ever been placed before the people of 
Massachusetts deals so intimately with the lives of such a 
large number of our people. The very complexity of it, as 
well as its tendency to alter the close relation between the 
medical profession and the people, demands that we deal with 
it with caution and care. 

WENDELL PHILLIPS THORE. 
EDNA LAWRENCE SPENCER. 



1917.] HOUSE — No. 1850. 49 



REPORTS ON OLD-AGE PENSIONS. 



INTRODUCTION. 

Old-age pensions have been the subject of investigation three 
times previous to the appointment of this Commission. The 
first investigation of which we have record was authorized by 
the Resolves of 1907 in accordance with which a commission of 
five persons to consider the subject of "old age insurance, or old 
age pensions, or annuities, " was appointed by the Governor and 
required to report in January, 1909. The time within which the 
commission was ordered to report was later extended by a 
resolve of 1909, and with a substantial added appropriation. 
The commission continued its investigation and reported to the 
General Court in 1910, its findings and conclusions being pub- 
lished as House Document No. 1400 of that year. A majority 
of the commission went on record as opposed to the establish- 
ment of any general non-contributory system of old-age pen- 
sions in Massachusetts. 

The second investigation of this subject authorized by the 
Commonwealth was made by a commission authorized by chap- 
ter 106 of the Resolves of 1913. The commission consisted of 
three persons who were appointed by the Governor, consisting 
of James E. McConnell, chairman, Magnus W. Alexander and 
Henry S. Dennison. 

Under the terms creating the commission it was required to 
make its report on or before Jan. 10, 1914. The commission 
found, however, that it would be impossible to report within 
the specified time limit, the Legislature subsequently extended 
the time until March 16 of that year, and the report was 
made as of that date. The findings and conclusions of the 
commission are to be found in House Document No. 2400 of 
1914. This commission also reported that from the evidence it 
had been able to gather there was no ground upon which to 



50 SOCIAL INSURANCE. [Feb. 

recommend definite legislation on the subject of old-age pen- 
sions. The commission recommended a more thorough and far- 
reaching investigation of old-age dependency, and the necessity 
for this sort of aid, and further recommended that the investiga- 
tion be undertaken in connection with the next regular decen- 
nial census of the Commonwealth. The commission suggested 
that legislation in the Commonwealth on the subject might be- 
come necessary at some future time, but did not feel itself 
justified in suggesting or submitting any definite legislation on 
the subject at that time. 

The third study and investigation of the subject of old-age 
pensions was made as a result of the suggestion of the 1913 
commission, and was authorized by the General Court of 1914 
by a resolve directing the Bureau of Statistics to conduct an 
inquiry in connection with the taking of the decennial census 
in order to determine the extent of age dependency in Massa- 
chusetts. 

Further reference is made to this report later on. In this con- 
nection it is interesting to note that the Commonwealth has ex- 
pended approximately $50,000 during the last nine years in 
studying and investigating the need and advisability of a sys- 
tem of pensions for its aged citizens. 

The commission of 1909 published in connection with its re- 
port a descriptive account of all the then existing systems of age 
pensions. These data have been further amplified and brought 
up to date by the Bureau of Statistics in connection with its 
study just completed, and, through the courtesy of the director 
of the Bureau, the Commission is printing in its Appendix a 
descriptive account of national old-age pensions. The Bureau 
of Statistics has been at considerable pains and expense in col- 
lecting the information contained in the Appendix above men- 
tioned, and the Commission regards it a most excellent and 
valuable summary of this class of insurance. 

In its investigation of the subject of age pensions the Com- 
mission found in the report which has just been published by 
the Bureau of Statistics, entitled "Report of a Special Inquiry 
relative to Aged and Dependent Persons in Massachusetts," 
practically all the information necessary for its use. This in- 
vestigation and report was made pursuant of a resolve passed 



1917.] HOUSE — No. 1850. 51 

in 1914, directing the Bureau to conduct an investigation in the 
State in connection with the taking of the decennial census in 
the year 1915, to determine the number of persons over sixty- 
five years of age in the cities and towns of the Commonwealth, 
their length of residence in the State, the number of dependent 
persons of all ages being supported in the various public and 
private institutions within the State, the number of persons 
receiving aid from any public or private source and the cost of 
such aid. 

Through the courtesy of the director of the Bureau of Sta- 
tistics such data as had already been gathered in connection 
with its investigation on the subject of aged indigency were at 
once made available to the Commission on its organization. 

While reference is made in various parts of the Commission's 
report to data contained in the report of the Bureau of Sta- 
tistics, the Commission at this time respectfully commends to 
the attention of the members of the General Court this docu- 
ment, which merits their careful study. It is doubtful if any 
State has ever conducted so thorough and far-reaching an 
investigation, or gathered and compiled such an amount of in- 
formation on the subject of age dependency as is contained 
in this excellent report. 

A majority of the Commission are in accord in recommending 
the principle of non-contributory age pensions. Those members 
of the Commission, constituting a majority, who recommend 
the principle of old-age pensions are also in partial agreement 
as to the taxation of intangible property in the Commonwealth 
as the best means of providing the necessary revenue for the 
payment of the pensions. Some of the majority, however, 
regard it as the part of wisdom to await the results of the new 
income tax recently enacted in the Commonwealth and de- 
signed to uncover much of the so-called "hidden wealth" in 
the State. In the event of this new form of taxation revealing 
any such appreciable amount of intangible property as has 
at different times been estimated to exist, they believe it 
might then well be made to form the chief means of supporting 
a system of non-contributory age pensions. The other mem- 
bers of the majority recommend the passage of immediate 
legislation establishing a State system of old-age pensions, and 



52 SOCIAL INSURANCE. [Feb. 

suggest that the income from the intangible wealth in the State 
should bear the burden of these pensions. Should the present 
income tax law prove inadequate in bringing to light enough 
property to yield a sufficient revenue for the payment of these 
pensions, these members, forming the major part of the major- 
ity members, suggest that it be left to the General Court to 
devise means of reaching this source of wealth, which in their 
opinion forms such a large part of the wealth of the State. 

Certain members of the Commission, as will be noted from 
one of the minority reports herewith, do not regard this as 
the proper time for putting into operation in the Common- 
wealth any State system of old-age pensions. While these 
members are of the opinion that as between the two systems 
the contributory has more merit than the non-contributory, 
they consider that the Commission's study shows neither the 
need nor the demand to warrant the establishment of any age 
pension system at the present time. The majority reports as 
well as the dissenting reports are herewith subjoined. 



1917.1 HOUSE — No. 1850. 53 



STATEMENT OF WENDELL P. THORE, EDNA L. SPENCER 
AND EDWARD G. MORRIS, RELATIVE TO NON-CON- 
TRIBUTORY OLD-AGE PENSIONS. 

We approach this subject of old-age pensions with solemn 
thought. We have felt the intense responsibility that must 
come to any one concerned in a report on a subject which 
touches so intimately the lives of such a vast number of our 
people and which means so much to their general welfare and 
happiness. We have been aware that the greater number of 
our citizens are in accord with our desire that a so-called non- 
contributory old-age pensions law be enacted to fill a very vital 
and necessary need — a humanitarian service. We realize, in 
advocating this measure, that the first test of a State's or 
Nation's greatness is in the care it takes of the people who 
inhabit it. 

After studying the problem of "protecting wage earners from 
the burdens of old age/' we have concluded that it is a very 
different problem from other social welfare measures, in that 
there can be no recapitalization of energy and strength in the 
aged citizen. When old age comes to those without sufficient 
means, prospects of employment and health and other oppor- 
tunities are passed, or quickly passing, all lessening the pos- 
sibility of their providing for themselves, and we have them to 
treat humanely, with love and respect, or to throw deliberately 
on the scrap-heap, like human junk, to be neglected till death 
brings them peace. 

Therefore we are convinced that the Commonwealth should 
establish at once a system of non-contributory old-age pensions 
to protect our deserving aged citizens, both men and women, 
who are without sufficient means and unable properly to provide 
for themselves. We have reached this conclusion from the 
evidence given at our hearings and from the knowledge of the 
continuously increasing and intense demand for such pensions 
prolonged over a period of years in Massachusetts. 

We hold that the so-called non-contributory system of pen- 
sions is the most humane and equitable; that such protection 
is an inalienable right of good citizenship; and that a Christian 
State or Nation, dedicated to the welfare of its people, cannot 



54 SOCIAL INSURANCE. [Feb. 

with honor continue to degrade its worthy aged people through 
pauperism after they have given of their strength and vigor to 
create its wealth, its greatness and its glory. 

The result of our examination of the question of the causes 
of poverty in old age among our people does not agree with the 
opinions of those who maintain that we are an unthrifty people, 
and therefore fail to provide for ourselves through life. 

We find that greed in industry is the principal factor, — the 
greed which does not permit a living wage; that greed in 
industry penalizes the industrial army in all its ramifications, 
making a disastrous condition of need through the lives of the 
workers, thus keeping them in a condition of prolonged poverty. 
We are positive that greed in industry demands inhumanely, 
like Moloch, large profits for the few from the backs of the 
many; that greed in industry, which creates the underpaid 
toiler, is unholy, is the great industrial disturber, the funda- 
mental evil which brings the demoralizing hardships that sap 
the vitality and destroy the physical and moral well-being of 
the workers. Its baneful influences enter the homes, reduce 
industrial efficiency, and make the continuous and ultimate 
costs in the lives of the toilers such that it is impossible for 
them to save little, if anything, for times of need and for the 
later years of life. 

So long as this unfair, inimical and calamitous system of 
dividing the profits of labor continues slowly and painfully to 
drag the wage earner into and along the path of poverty to old 
age, just so long must there be a justifiable demand for non- 
contributory old-age pensions to be provided as a right of 
citizenship under the collective action of the Commonwealth to 
protect such victims. The justice of this demand no citizens 
can honorably deny. 

No better or more fitting reasons can be given for the estab- 
lishment by this Commonwealth of so-called non-contributory 
old-age pensions than these, which were given by Lloyd George 
when Chancellor of the Exchequer in his advocacy of the 
measure in the British Commons in 1908: — 

The first general criticism is that this is a non-contributory scheme. 
... I demur altogether to the division of the scheme into contributory 
and non-contributory. So long as you have taxes imposed upon commod- 



1917.] HOUSE — No. 1850. 55 

ities which are consumed practically by every family in the country, there 
is no such thing as a non-contributory scheme. You tax tea and coffee, 
sugar, beer and tobacco, and you get a contribution from practically every 
family in the land one way or another. So, therefore, when a scheme is 
financed out of public funds, it is as much a contributory scheme as a 
scheme which is financed directly by means of contributions arranged on 
the German or any other basis. A workman who has contributed health 
and strength, vigor and skill, to the creation of the wealth by which taxa- 
tion is borne, has made his contribution already to the fund which is to 
give him a pension when he is no longer fit to create that wealth. There- 
fore I object altogether to the general division of these schemes into con- 
tributory and non-contributory schemes. 

There is, however, a class of scheme which is known as the contributory. 
There is the German scheme, in which the workmen pay into a fund. It is 
rather a remarkable fact that most social reformers who have taken up 
this question have at first favored contributory schemes, but a closer 
examination has almost invariably led them to abandon them on the 
ground that they are unequal in the treatment of the working class, 
cumbersome and very expensive, and in a country like ours hopelessly 
impracticable. . . . Let me give you now two or three considerations 
why, in my judgment, a contributory scheme is impossible in this country. 
In the first place, it would practically exclude women from its benefits. 
. . . Another consideration is that the majorhy of the workingmen are 
unable to deflect from their weekly earnings a sufficient sum of money to 
make adequate provisions for old age, in addition to that which they are 
now making, for sickness, infirmity and unemployment. 

We subscribe to these statements, for we believe that every 
statement made by Lloyd George herein is applicable to the 
conditions and touch the same principles as those with which 
we are concerned in relation to our own people. 

The term non-contributory is used in this report mainly as a 
contra-distinction between it and the term contributory. We 
all know that, directly and indirectly, not a single person 
escapes payment for any government expenses, and we are 
positive that the so-called non-contributory system is not a 
system that "robs from the rich to give to the poor." 

It is said that there is no difference between non-contributory 
old-age pensions and poor-relief. It is claimed by those who 
are willing to remake language to suit their own purpose that 
poor-relief called pensions does not alter the fact that it is 
poor-relief; but, if we accept the word pensions with its under- 
stood meaning, it is a periodic allowance to an individual in 



56 SOCIAL INSURANCE. [Feb. 

recognition of meritorious work or service. We claim that the 
industrial army and the mothers in the homes render such work 
and service to the State, and that such pensions are not de- 
grading and pauperizing, but come as rewards of merit. Poor- 
relief, in its understood meaning, is a particular kind of pauper- 
ization, a gratuity and a pauper's dole, given, not .as a 
particular recognition of merit or of services rendered, but as 
charity. We maintain, as they did in Great Britain, that there 
is a complete distinction between non-contributory old-age 
pensions and poor-relief. 

It will be argued by some that because numbers of needy 
aged people did not appear before the Commission in support 
of pensions there is no real concerted demand from them for it. 
We disagree with this deduction, and hold that lack of means, 
inability to be present, no knowledge of the hearings, and just 
pride in refusing to disclose publicly their need until pensions 
are to be granted are some of the actual reasons why we did 
not hear from more of the needy aged. A similar seeming 
attitude on the part of the English people was also noticeable 
previous to the enactment of their old-age pension law. Common 
knowledge compells us to believe there are numbers of such 
people who would gladly welcome old-age pensions here in 
Massachusetts. 

Others hold that only those who will require pensions imme- 
diately are interested in the coming of such a law, but we know 
from experience that thousands of citizens below the pension- 
able age want pensions for those who need them now and as a 
safeguard for themselves in the coming years. 

Appealing for this protection because of the known impos- 
sibility of their people to provide for themselves in old age 
were members of labor unions representing thousands of workers 
who made vigorous appeal for the establishment of a system of 
non-contributory old-age pensions. To this appeal at our 
hearings was also added the favorable support of men and 
women in various walks of life, while the opposition to the 
non-contributory system was a negligible factor. 

Added to this demand for non-contributory old-age pensions 
was the overwhelming vote recorded at the last two State 
elections in favor of this measure through the medium of a 
referendum question which read as follows : — 



1917.1 



HOUSE — No. 1850. 



57 



Shall the representative from this district be instructed to vote for non- 
contributory old-age pensions, so as to have the Commonwealth pension 
its deserving needy aged citizens, women and men, over sixty-five years of 
age and residents of the Commonwealth for at least fifteen years? 



In 1915 the vote upon this question in the cities and towns 
where* it appeared upon the ballot was : — 



Yes. 



No. 



Brockton, 

Cambridge, 

Lawrence, 

Methuen, 

Abington, 

Whitman, 



7,215 


1,341 


8,697 


2,718 


5,082 


1,303 


1,035 


308 


671 


185 


978 


216 



In 1916 the vote was: — 




Yes. 


No. 


Boston (Wards 9, 10 and 11), . . . . . 

New Bedford (Eighth Bristol District), 


6,147 
3,561 


1,076 
1,140 





We are aware of criticisms that will be made against such 
referenda, but this one was not vague and misleading, as many 
are; it was easily understood by the people. They knew from 
their experience the need of old-age pensions, and voted accord- 
ingly, regardless of the opposition, for they had seen relatives 
and friends suffering in their last years for the want of such 
pensions. 

At its convention in New Bedford in 1915 the Massachusetts 
State Branch of the American Federation of Labor, which 
represents approximately 200,000 people, adopted this 
resolution : — 

Because the conservation of our aged citizens, women and men, is better 
than hoards of wealth; because we believe that Nations only reach great 
heights of prosperity and happiness as they protect and care for their 
people; because we know that happiness and prosperity can come only to 
the Nations which care firsc for the children of God, the children of 
men, be it 



58 SOCIAL INSURANCE. [Feb. 

Resolved, That the State Branch of the American Federation of Labor, 
in convention assembled, give its full support to the establishment by the 
Commonwealth of Massachusetts of a non-contributory old-age pension 
system, to keep our aged citizens, women and men, free from the fear of 
want, free from the barbaric stigma of pauperism when they are no longer 
able to toil. 

» 

This resolution came after labor unionists for years had held 
that they did not want pensions of any kind, holding the hope 
that the time w 7 ould come when they would be receiving a wage 
which would allow them to save for old age. But the time has 
not come, and they are now, as the resolution says, in favor of 
non-contributory old-age pensions, because they are unable to 
save for old age under the living conditions of the day. 

As a further demand, in 1915 every political party in Massa- 
chusetts had some reference, directly or indirectly, in its plat- 
form relative to old-age pensions, or to some means of protecting 
our people against the hazards of poverty in old age. Governor 
McCall, mindful of the people's desires, and faithful to his 
promises, said in his inaugural address in 1916, when asking for 
an investigation of this subject w T ith a view to securing remedial 
legislation: — 

The members of the majority party also stand pledged to an investiga- 
tion for the purpose of devising a form of social insurance to protect the 
worker against the vicissitudes of sickness, unemployment and old age. 
I recommend that you inaugurate such an investigation with a view to 
the passage of suitable laws. I commend to your attention systems 
in force in Germany, Great Britain and in other countries in reference to 
these subjects. The German policy was established by Bismarck, under 
whose government it was declared in 1881, in a speech from the throne, 
that "those who are disabled from work by age or invalidity have a well- 
grounded claim to a greater care from the State than has hitherto been 
their share. To find the proper means for their care is a difficult, 
but also one of the highest, tasks of any community which rests upon the 
moral foundation of a common Christian life." 

Governor McCalFs inaugural address in 1917 is further proof 
of the known desire to have such a pensions system as we 
recommend in the Commonwealth. Our Governor, under- 
standing the need, specifically requests the Legislature to enact 
a system of old-age pensions without contributory provisions. 
This splendid appeal is epochal, for it not only tends to help 



1917.] HOUSE — No. 1850. 59 

and to protect the aged people of Massachusetts, but also those 
of the Nation. It is, indeed, an emancipation proclamation 
that will eventually strike the shackles of old-age poverty 
from all Americans. 

The compelling force which we felt it our main duty to obey 
is in the knowledge of the humane justice and the bringing of 
happiness to thousands of our people by the enactment of such 
a pensions law. And we feel intensely that such a law will, as 
it did in England, finally win the favor of its most vigorous 
opponents because they will inevitably profit by its enactment, 
as have those who opposed its coming in the United Kingdom. 

The protection of old-age pensions by the non-contributory 
method is needed by all, and is such that those who are now 
well-to-do cannot afford to be against it. They might lose their 
wealth, as others have, and then these pensions would come as a 
godsend to them. The strangest thing of all is that the great 
masses of our people have been willing to enter old age and 
starve for years, when they had the power of the ballot with 
which to provide an old-age pensions law. The retrospect of 
thousands of good citizens who have suffered because of lack of 
means in old age is a sad one to contemplate; it is a stain upon 
the honor of the proudest State and of the proudest Nation of 
the world. 

We desire at this time to have the people of Massachusetts 
understand that in recommending a non-contributory old-age 
pensions system we are not advocating a scheme of pensions 
which has not already had a practical test. It has been in 
operation in New Zealand since 1898, in Australia since 1909 
(the entire State), and in England since 1909. In all these 
countries the law has given entire satisfaction. 

We call to your attention the fact that within the State are 
systems of non-contributory old-age pensions costing several 
hundreds of thousands of dollars, which enormous amount is 
paid from the people's treasury to retired public servants who 
have always had better hours of labor, better pay, and, con- 
sequently, greater opportunity to provide for their old age by 
saving. Here the Commonwealth has established the precedent 
of non-contributory old-age pensions for well-paid government 
employees at the people's expense. 



60 SOCIAL INSURANCE. [Feb. 

In the city of Boston the amount of non-contributory old-age 
pensions reached the total this year of about $588,000, paid by 
all its citizens to a comparatively few former government 
employees now retired under various pensions laws. Other 
cities, likewise, have civil pensions lists on the non-contributory 
basis. 

In 1915 four retired judges of our Supreme Court each 
received a retirement pension of about $625 a month. 

In 1906 Justice Charles Allen of the Supreme Court retired 
under the act which allows judges to receive a special pension. 
His pension was $5,200 a year, and he continued to draw this 
pension for about seven years, until his death in 1913. When 
his will was probated it was found that he left an estate in- 
ventoried at $776,970.52. 

Why is it that no questions about "thrift" are brought for- 
ward in these cases of civil pensions for judges and others? 
Why is it that there is no fear of lessening the "moral fiber," 
or of the "loss of manhood" if these judges and other such 
pensioners do not contribute to the general fund? Why is it 
that no questions as to the need of the recipients are asked? 

When these pensions were established the majority of our 
people had little or no knowledge of them or of their significance. 
They have little or no knowledge of them to-day; and yet 
everywhere there has been shown dissatisfaction with a system 
of government that protects a privileged and exclusive few in 
their old age with non-contributory pensions at the expense of 
those who are excluded from such pensions. This is one of the 
causes of the constant and irresistible demand for such pensions 
for all our people who are worthy and need them. 

Every citizen of Massachusetts has contributed his propor- 
tionate share toward these pensions; and yet in their old age 
many of these contributors are obliged to face their closing 
years without the protection of pensions, and if they are with- 
out means they must accept help from the degrading hand of 
charity. We ask, Is such a system of pensions just or equi- 
table? 

It will be held that some face greater dangers in public 
service than do others in industrial activity. But with this 
opinion we cannot agree. We find in the great industrial 



1917.] HOUSE — No. 1850. 61 

establishments high-speed machinery with ever-present danger 
to the workers; we find such dangers in railroading, in the 
building trades and in other occupations. In comparison with 
the public service rendered the Commonwealth, upon which 
arguments are based favoring civil pensions for judges and 
other government employees, we place the good mother in the 
home and the toiler in industry, and hold that they, whose 
employment is neither as remunerative nor as steady, and whose 
opportunity to save is not as great, render as good service to 
the State as do government employees. 

The opinion has been advanced that the system of pensions 
which we advocate will place an intolerable burden upon the 
State, but we do not believe it will be as costly as our present 
burdensome and highly unsatisfactory methods of creating 
pauperism from cold and ignominious charity. 

Recent statistics (1915) show that we are at present paying 
enormous sums for known public and private poor-relief amount- 
ing to $3,233,948 for approximately 36,496 people sixty-five years 
old or over. This great amount does not include the money 
spent by children who support their parents or by those who 
aid needy relatives and friends, — people in most cases who 
cannot afford to do so. This amount of money not ascertain- 
able would probably run into the millions. If this unknown 
amount could be added to the cost of public and private 
charity the total would undoubtedly exceed $9,000,000 a year. 
Increasing the approximate number of people who accept 
known public and private poor-relief from 36,496 to 50,000 — 
people sixty-five years old and over, with a maximum pension 
of $2.50 for each person a week, and adding administration 
expenses — the cost would aggregate $6,500,000. We believe 
this amount would not overreach the total now expended by 
relatives and friends, joined with that for the maintenance of 
degrading almshouses throughout the State and for the support 
of the shameful public and private poor-relief now given per- 
sons within our Commonwealth. 

We believe an approximate cost of a system of non-contrib- 
utory old-age pensions may be ascertained by comparing the 
expense of such systems in proportion to the population of such 
countries where similar systems are in operation. 



62 SOCIAL INSURANCE. [Feb. 

In March, 1914, the total amount paid in old-age pensions in 
the United Kingdom was £12,370,299. The administrative 
expenses were "practically inconsiderable," notwithstanding 
that there were 984,131 pensioners, of whom 931,344 were 
in receipt of the full five shillings pension. The remainder 
received less, down to one shilling, under the schedule of the 
English act which gives, according to income and property, 
from five shillings to one shilling pensions. The English act 
covers a total of about 46,000,000 people in the United Kingdom. 

In Australia, in 1915, the total number of old-age pensioners 
was 90,892. The amount paid in pensions was £2,691,317, and 
the amount paid to benevolent asylums for the maintenance of 
pensioners was £27,630. The cost of administration in propor- 
tion to every £100 of pensions and asylum payments for the year 
1915 was £1 15s. (4 per cent.). ' The total number of pensioners 
to every 10,000 of the population was 184. The estimated 
population of the Commonwealth of Australia was 4,958,000 in 
1915. 

In New Zealand on March 31, 1915, there were in force 
19,352 pensions. Payments made at the end of the financial 
year were £460,814. The estimated population of this country 
was 1,095,994 in 1914. 

We are aware that it is impossible to state at this time just 
how many applications would be forthcoming for pensions here 
in Massachusetts, because we know that many of our people 
are practically suffering slow starvation rather than appeal for 
poor-relief, charity or enter an almshouse. 

It should be understood by all that a non-contributory system 
of pensions like that which we recommend is a partial and not a 
universal system. It is partial in that it excludes the rich and 
those well-to-do, -who could not comply with the requirements 
as to qualifications because they have more property or income 
than one would be allowed to possess if granted a pension. 
This would of course greatly reduce the prospective number of 
applicants under any age group, whether or no the pensionable 
age were placed at sixty-five or seventy years. Allowing that 
there are about 189,000 men and women over sixty-five years 
old in Massachusetts, the process of elimination under the 
qualifying clauses of a pensions act, as shown in the proposed 



1917.] HOUSE — No. 1850. 63 

law appended hereto, would very greatly reduce the number of 
those who would be eligible under this age limit, and the 
fabulous figures that have been quoted from time to time as to 
the cost of a pensions system for people over sixty-five years 
old would be shown to be out of all proportion to fact. 

The non-contributory system is not new under our form of 
government. Schools, roads, parks and all other public im- 
provements are, in general, paid for on the non-contributory 
basis involving direct and indirect taxation. No one specifically 
contributes to them. They are, for the most part, provided 
from general taxation. 

In conjunction with other schemes we have considered the 
feasibility of a compulsory contributory scheme of old-age 
pensions similar to the German system, maintained from funds 
contributed by the State, the employer and the employee, but 
we find ourselves unable to recommend such a system of pen- 
sions. We hold that such a system as this, to which the worker 
must contribute, would be an unjust immediate taking from 
him of that money he cannot afford to pay. The cost of 
maintaining a compulsory contributory old-age pensions system 
with its complicated system of bookkeeping, and other details 
in relation to those employed and those temporarily out of 
employment, would be a tremendous and needlessly expensive 
burden extending over forty years for thousands of our citizens 
in the checking of contributions and other matters. Without a 
State system of unemployment protection (insurance), to care 
for the worker and furnish some funds for him during periods of 
unemployment, there might occur lapses, making endless diffi- 
culties which do not burden the non-contributory system. 

There is, moreover, the proper American repugnance to being 
compelled by law to contribute specifically to any purely 
governmental function of this character. The majority of our 
people will demand that such protection as this should come 
to them without any such requirements. 

Let us set these difficulties aside for a moment, and analyze 
the compulsory contributory system and see who pays the cost 
which, superficially, is said to be borne by three distinct con- 
tributors, — the State, the employer and the employee. 

1. We find that when the State contributes it is the people's 



64 SOCIAL INSURANCE. [Feb. 

contribution; and as the workers constitute the greater number, 
in this first instance they pay the bill. 

2. When the employer contributes, he being a manufacturer 
of the necessaries of life, such as shoes, clothing, etc., he will 
charge this contribution expense to the cost of the products 
which he sells to the workers. And again the workers pay the 
bill. 

3. Now comes the employee's contribution. Again he pays. 
Consequently the workers pay the entire bill or contribution. 

It is no mystic problem, this contributory system, but simply 
a contributory hand entering the pockets of the workers three 
times and compelling them to pay it all. 

Is such a system a fair one which puts on the backs of the 
major part of our people, the workers, the entire cost? What 
is to be done with those who are past fifty years old, whose 
earnings are very limited and who could not under any possible 
circumstance contribute? If the contributory has been, or can 
be proven to be of greater value than the non-contributory 
system, why is it that the countries which have such a system 
have not changed to the contributory plan? 

It is extremely difficult to determine just what amount should 
be granted as a full old-age pension, but the following figures 
given by the State Board" of Charity as to the present cost of 
caring for the aged are interesting and may suggest the likely 
amount: — 

From all this office knows of local expenditure for indoor poor-relief, 
$3.50 per week would represent a fair average per capita cost for the sup- 
port of each person over sixty-five years of age in almshouses. This would 
represent an average yearly cost for each person of $182. 

In answer to the question, Confining the question to citizens 
of the Commonwealth, what was the largest and what was the 
smallest amount supplied any needy person over sixty-five years 
of age in 1916, they reply that the figures are unknown. 
Answering the question, What is the most costly institution of 
poor or almshouses, they say : — 

Taking the question to mean the costliest institution on a per capita 
basis for the year just closing, the most costly institution is probably that 
of Milton, where the expenses are in the neighborhood of $10 a week for 



1917.] HOUSE — No. 1850. 65 

all inmates. In addition the institution provides very good care for its 
patients. The institution which costs the largest gross amount is that of 
Boston, because of its numbers. 

We quote these figures from the State Board of Charity as a 
particular indication of what the Commonwealth spends at 
times for indoor poor-relief. What good citizen who refuses to 
accept pauperism is not entitled to the same expenditure for 
his comfort in old age? 

We wish to call your attention to the fact that we are now 
compelled to care for any needy people of advanced years 
should such need come to the attention of the authorities. 
Consequently, the expense of old-age pensions could not be 
considered an entirely new burden upon the State in the form 
of taxation, as many people receiving such poor-relief would 
become old-age pensioners. As a further suggestion of proof 
that the funds now used for outdoor and indoor paupers, public 
and private poor-relief, would in a large measure be transferred 
to a pensions fund without the necessity of asking for new 
appropriations for such people, we quote the following from the 
sixty-second statistical abstract of 1915 of the United 
Kingdom : — 

A number of paupers, especially outdoor paupers, ceased to be de- 
pendent on poor-relief in 1911 in consequence of the partial removal of 
the pauper disqualification for old-age pensioners. . . . The total number 
of indoor paupers over seventy years of age (pensionable age) decreased 
from 57,000 at Jan. 1, 1910, to 47,197 at Jan. 1, 1915. Correspondingly, 
the number of outdoor paupers decreased from 138,223 at Jan. 1, 1910, 
to 8,456 at Jan. 1, 1915. 

These figures relate only to England and Whales, and do not 
include Scotland and Ireland or other parts of the United 
Kingdom. It will be found by these figures that numbers of 
outdoor paupers change to pensioners without added expense 
to the government! It is conclusive evidence that the people 
prefer to be pensioners rather than paupers. 

The State Board of Charity's report for the year 1915 gives, 
as a total valuation of almshouses in Massachusetts, $4,732,- 
129.53. The cost of repairs for the year amounts to $305,901.18 
of which $169,075.54 was spent on new construction at Long 



66 SOCIAL INSURANCE. [Feb. 

Island, Boston. These figures are based on returns made by the 
overseers of the poor for the cities and towns. 

The total amount of salaries for wardens and matrons is 
$108,287. In 167 almshouses the management is in' the hands 
of wardens and matrons, and in 5 by a matron only, which 
makes the State's total of 172 almshouses. The combined 
salaries for these officials average about $1,200 a year for the 
cities and about $500 for the towns, in addition to their board 
and lodgings. About three-fourths of the cities and towns 
employ a total of 519 assistants who are generally paid by the 
city or town, except in a few instances by the wardens. We 
find that the town of Acton has an almshouse property valua- 
tion of $5,000 and a total annual cost of $2,070.86, with a net 
cost of $649.39. There were but two inmates, one between 
sixty and seventy, and the other between seventy and eighty. 
The average cost per person outside of the property investment 
was $324.69. 

The town of Adams' almshouse valuation is $20,262. Its 
total annual cost is $6,903.30, with a net cost of $4,874.09. 
There were 25 inmates at an average cost of maintenance per 
person of $194.96. 

The town of Bellingham's almshouse valuation was $9,957.32. 
Its total annual cost was $3,381.10, with a net cost of $1,229.77. 
The three inmates averaged a per capita cost of $409.59. 

The town of Easton's almshouse valuation was $6,335. 
Total annual cost was $4,324.91. Net cost, $2,434.78. The 
average cost for the six inmates was $405.76 each. 

The almshouse valuation for the city of New Bedford was 
$186,650. Total annual cost was $38,845.98, with a net cost of 
$35,658.13. At the time of visitation there were 198 inmates, 
and the average cost of maintenance of each was $180.09. 

The almshouse valuation in the town of North Andover was 
$14,000. Total annual cost was $4,247.48, and the net cost 
$3,661.02. Six inmates averaged an expense per person of 
$610.17. 

In North Reading the town's almshouse has a valuation of 
$9,000. Total annual cost was $4,245.93. Net cost, $141.95. 
This institution had but 1 inmate. 

Reading's almshouse valuation: $9,500. Total annual cost, 



1917.] HOUSE — No. 1850. 67 

$2,625.24. Net cost, $2,035.75. Number of inmates, 6, at an 
average cost per person of $339.29. 

We call your attention to the immense total amount now 
being expended in the Commonwealth for degrading almshouses, 
and the staggering total invested in these various properties 
amounting to nearly $5,000,000 to provide for a total of only 
5,007 persons. The foregoing list, selected at random from the 
Board's report, shows significant figures in the general cost per 
person, the lowest in the list being $141.95, at Reading, and the 
highest being $610, at North Andover. These figures prove 
conclusively to us that a great number of the almshouses in 
the Commonwealth should be abolished, and that a large 
county pension home should be established for purpose of 
economy in each of the several counties, using the best alms- 
house, where possible, to house those unable to care for them- 
selves and who are without friends or relatives and need such 
institutional care. 

The total number of inmates in the almshouses throughout 
the Commonwealth in 1915 (the latest available statistics) was 
5,007 persons. Combining the cost of repairs that year wHh 
improvements and the assessed valuation, together with the 
salaries and expenses of wardens and matrons, the grand total 
expense is $5,146,317.71. The investment for these 5,007 in- 
mates averages $1,027.82 per person. It is our belief that a 
large part of this cost for institutional care would be unneces- 
sary if the greater majority of these people were old-age pen- 
sioners and could live in private families or in the homes of 
relatives. In fact, several towns have already come to this 
conclusion and are supporting such dependents in private 
families. Included in such towns are Marshfield, Huntington 
and Chester. 

In considering how to obtain the necessary funds to support 
such a system of non-contributory old-age pensions without 
new or extra taxation, we include for your careful study a declara- 
tion made by the Tax Commissioner of the Commonwealth in 
his report, House, No. 2290 of 1913, relative to the enormous 
amount of intangible personalty (stocks, bonds, etc.) which 
has escaped taxation for years, though legally taxable. 

Tax Commissioner William D. T. Trefry said in this report: — 



68 SOCIAL INSURANCE. [Feb. 

That . . . $4,646,264,910 is intangible personalty subject to taxation, 
but which is not taxed because the Legislature of the Commonwealth has 
never been willing to enact laws to compel its disclosure. These considera- 
tions point to an amount and value of intangible personalty in this Com- 
monwealth which escapes taxation which is astounding. 

This statement shows that while the little householder and 
the loaf-of-bread buyer have been continually taxed directly 
and indirectly to bear the burdens which this great wealth 
should have equally borne, the owners of these billions of 
dollars' worth of intangible personality legally taxable have 
evaded their just responsibilities because Legislatures have been 
indifferent. The income from taxation due the State from this 
property was estimated nearly four years ago to be over 
$50,000,000, of which the larger part was never paid. If this 
property had been compelled to yield the taxes due from it 
there would have been enough to provide old-age pensions and 
other social welfare measures without any thought of added 
taxation. A new income tax law has recently been enacted, 
and it is expected that it will obviate the difficulties of which 
the Tax Commissioner complains. 

While we do not believe it will get more in taxes from the 
intangible personalty than could have been secured under the 
old method, if a proper and drastic disclosure law had been 
enacted, it may, nevertheless, give the Commonwealth an 
opportunity to know who are the c owners of this property and 
where to tax it. 

Here is the nest-egg that should bear the burden of old-age 
pensions. 

We recommend that an extra 2-mill tax per thousand be 
placed on such holdings which come under the new income tax 
law where the value of such property held by an individual, 
directly or indirectly, is more than $2,000. We believe that 
this 2-mill tax, if applied, would bring at least $10,000,000 of 
new money, of just taxes, into the State treasury, and would 
not place a new direct burden upon real estate, but would be 
a just contribution from that wealth which has for years evaded 
taxation while the masses of our people have been compelled to 
pay. If this contemplated amount, or a good part of it, were 
added to the amount we now spend to degrade our aged people 



1917.] HOUSE — No. 1850. 69 

with poor-relief in its various forms, we would have more than 
enough with which to establish and maintain a non-contribu- 
tory old-age pensions system. 

As another method by which to obtain funds for such a pen- 
sions system, we recommend that the Commonwealth open an 
old-age fund, to be open forever to receive bequests, contribu- 
tions, escheats, unclaimed savings, unredeemed railroad pas- 
senger rebates and other moneys. Our reason for this recom- 
mendation is based on the fact that there have been millions 
of dollars left by people in the State to benefit old people's 
homes and private charitable organizations, and we believe 
that if it were known that the Commonwealth had opened such 
a fund to help protect its worthy aged citizens it would, if 
properly advertised, receive a large amount of money. But, 
withal, if it should be necessary to include any of the cost in the 
general tax levy, we are agreed that it should be done, for we 
feel that the general welfare will be so much benefited that all 
can afford and will be willing to bear a proportionate cost. The 
principle of old-age pensions being sound, surely we are able 
to get the money necessary to maintain such a system. 

With the same problem in view we call to your attention the 
fact that there are at present savings banks assets within the 
Commonwealth of $1,078,282,174 and deposits amounting to 
$997,000,000, represented by 2,457,264 accounts, an average 
of $406.02 for each account. The question in our minds in 
relation to this vast amount of savings is whether, by the in- 
corporation of a State savings bank, this money could not be 
handled under the direction of the Commonwealth with a 
greater degree of safety than is now given it, and, at the same 
time, be made to pay larger dividends by loaning such money 
directly to the highest bidder, and sharing such earnings, after 
the expenses of administration have been deducted, with those 
who have struggled to acquire these savings. Instead of per- 
mitting this money to pay only 3 or 4 per cent, to the depos- 
itors through the indirect methods now employed of permitting 
certain propositions to be called "'savings bank investments," 
and allowing the use of this money to help those who control 
such propositions to make large fortunes from such savings 
while the depositors themselves receive comparatively small 



70 SOCIAL INSURANCE. [Feb. 

and insignificant returns, the State should enter the savings 
bank business, if possible, to benefit not only depositors, but 
also the public treasury and old-age pensions. 

We would have gone more extensively into a discussion of the 
various systems of old-age pensions, insurance and annuities, 
but they have been treated in House, No. 1400 of the year 
1910, while civil pensions have been considered in House, No. 
2400 of the year 1914. We desire to say, however, that 1 we do 
not agree with their conclusion that no general system of old- 
age pensions is needed within the Commonwealth. 

We recommend that a study be made of the old-age pensions 
laws now in use in the United Kingdom, Australia and New 
Zealand, for each of these countries has had the non-contrib- 
utory plan in operation for many years. We call special at- 
tention to the invalidity part of the Australian act, and to that 
part of the New Zealand act which in general allows : — 

Any person otherwise qualified to receive a pension who owns property 
on which he resides, and which does not permit of the granting of a full 
pension, may qualify for the full pension by transferring the said property 
to a public trustee. The pensioner is permitted to reside on the said prop- 
erty, rent free, during his lifetime, but he must pay all rates and charges 
thereon. If a husband and wife, both being pensioners, are living together 
and one dies the survivor is permitted to continue to reside on the prop- 
erty. On the death of both pensioner and survivor, or where the pensioner 
is no longer entitled to a pension, the public trustee shall sell the property, 
and, after deducting from the proceeds of the sale the amount of pension 
paid as a consequence of the transfer of the property, together with his 
commission and interest at the rate of four per cent., shall pay the balance 
to the person or persons entitled thereto. Provision is made for a pensioner 
or survivor, or next of kin, paying such amounts as aforesaid at any time 
with a view to obtaining a retransfer of the property and obviating a sale. 

This appears to us to be an excellent provision, as the whole 
accumulation after years of toil of some of our people is rep- 
resented in a little home or farm. When the powers to earn 
have lessened, and there is not even a small income to provide 
the necessary wants, it often becomes imperative for the owners 
of such property to mortgage or sell their little homes. This 
provision in many cases would obviate such possibilities and 
allow those who so desire to remain during life in the home 
which represents all they possess after their years of struggle. 



1917.] HOUSE — No. 1850. 71 

It is sometimes argued by those who do not believe they will 
ever have need of an old-age pension that they should not be 
compelled to contribute directly or indirectly, through taxation, 
to the support of those who will become pensioners. If these 
dissenters were the only ones in the State who contributed taxes 
for things not specifically used by them, or for their protection, 
the workers would have a weaker foundation upon which to 
base their arguments for a non-contributory old-age pensions 
law. But the workers know they do contribute the greater 
amount in the building and upkeep of State roads over which 
the well-to-do automobilists travel, and over which the workers 
themselves seldom if ever go. Workers without children con- 
tribute through their direct and indirect taxes to the support 
of our public schools in which the cnildren of all are, or can be, 
educated. They support our public parks and other civic 
improvements which enhance the value of adjoining properties, 
— the real estate of others, — parks to which the masses of the 
workers never can go. 

This is but proof of the contention that every one in society 
is bearing the burdens of others. It is, in fact, the fundamental 
basis upon which society is organized in the form of a Common- 
wealth for mutual protection. " It is a social compact by which 
the whole people covenent with each citizen, and each citizen 
with the whole people, that all shall be governed by certain 
laws for the common good" (Preamble Massachusetts Consti- 
tution). 

If small householders object to helping others to an old-age 
pension, citizens who do not own houses, but who pay for fire 
and police protection and other civic betterments which enhance 
the value of the objecting householders' property, could just as 
well complain that they are providing something for others 
through direct and indirect taxation out of which they receive 
little or no direct benefits. Some think that the small house 
owner and the real estate owner are the only ones who will be 
obliged to pay, through taxation, for the costs of non-contrib- 
utory old-age pensions. , This opinion is an error, for such 
taxes are paid in the majority of cases by the rent-payers. In 
such a city as Boston there are thousands of people living in 
apartments who are continually paying taxes through their 



72 SOCIAL INSURANCE. [Feb. 

rents; they do not own real estate, but they are, logically, the 
real taxpayers. Surely it is this great army of rent-payers who 
have the right to complain, — these rent-payers who bear the 
unfair burden and who can easily prove at all times that they 
are paying for everything they get. 

There has been much moralizing as to what should consti- 
tute deserving citizenship under a pensions law. This argu- 
ment and that argument have been used against granting of 
pensions because of some inconsequential condition in which the 
applicant might have found himself during life. It is impos- 
sible for a Commonwealth to legislate upon such superficial 
details. We know that some people are mentally unequal to 
enter the battle of money-making against those of greater 
mentality; we know that many people would refuse to make 
money in a manner that others would not hesitate to employ; 
hence, moral honesty may be a prime factor of their inability 
to amass funds for their old age. Shall we condemn this 
honesty and penalize those who practice it by the poorhouse 
and pauperism? Shall we say to the man who has no wealthy 
relatives who could, by bequest, protect his old age, "You are 
condemned to the horrors of want when age has made it 
impossible for you to toil and protect yourself"? 

The Commonwealth cannot legislate motals into its people, 
nor can it equalize the ability and the earning power of its 
citizenry. Likewise, it cannot legislate thrift, nor can it legis- 
late against the laws of probability, nor can it enact laws that 
will make possible the coming of good fortune, so that all our 
people will be enabled to protect themselves through life. 
There can be no question but that all our people desire to be 
self-supporting through life; but circumstances over which they 
have no control bring them to an inevitable want in old age. 

The struggle to hold a position after one has reached the age 
of fifty, not to speak of sixty-five, is becoming more and more 
difficult, and the demand for younger workers to fill the places 
of the older employees continually increases. What are we to 
do with such workers? We are in duty bound to protect them; 
it is a real and just duty of the State. Yet our people toil on, 
hope on, with the thought that perhaps the good fortune will 
be theirs which will always make them self-providing. Shall 



1917.] HOUSE — No. 1850. 73 

we penalize them for their honest toil when they fail? Shall we 
consign them to the degradation of pauperism because they 
have hoped, because they have aspired, because they have 
failed righteously? 

For years many different bogeys have been used to prevent 
the coming of non-contributory old-age pensions. It has been 
said that it will destroy some mystic "independence" of our 
people; that it will lessen the wonderful buncombe "thrift," or 
fail to keep the "moral fiber" of our people stimulated; that 
it will lessen "filial obligation," or, perhaps, some "indolent 
citizen" would receive a pension. We are unwilling to let such 
implicatjions go unchallenged, because we know that our citi- 
zens deserve better treatment. 

•If it is true that a system of non-contributory old-age pen- 
sions to protect our people, which does not require any specific 
contributions, will break down our manhood ideals, why is it 
that our school system, our police and fire systems, our public 
parks systems, and other governmental businesses which are on 
similar non-contributory bases, without specific contributions, 
do not act as a deterrent to high standards of citizenship? To 
be logically consistent, then, why not make specific contribu- 
tions to all these governmental departments which, like non- 
contributory old-age pensions, insure protection? 

Among the many fallacious claims made is that some of our 
people will become indolent if a non-contributory system of old- 
age pensions is enacted; it is claimed they will suffer the hard- 
ships of a long period of forty years or more because of their 
indolence, so that at last they may receive a small pension. We 
cannot believe that any great number of our people would 
forego the opportunity of active participation in profitable 
work which would insure much more ample comfort than would 
be theirs from a small pensions allowance in old age. As a 
proof that such fears are not based on facts, indolence is a dis- 
qualification under pensions laws. As an instance we quote 
from the English old-age pensions act : — 

A person shall be disqualified . ... if , before he becomes entitled to a 
pension, he has habitually failed to work according to his ability, oppor- 
tunity and need for the maintenance or benefit of himself and those legally 
dependent upon him. 



74 SOCIAL INSURANCE. [Feb. 

This is but one of such regulations in the English pensions 
law that immediately destroys the fantasy of those who believe 
that a pension would come to the indolent and slothful. 

We advance the thought that it would, indeed, be better to 
treat even the so-called unworthy aged with the same kindness 
and forbearance we give the unfortunate criminal. No one 
would wish to permit great numbers of our people to suffer the 
brutality of poverty in old age because they fear that some so- 
called unworthy person might receive a pension. Shall we con- 
demn to the scrap-heap, like so much wasted material, thou- 
sands of good citizens because we are inane fault fenders and 
finicky dissectors of the moral worth in, and the causes of in- 
digence among, our people? Even if they have shortcomings as 
to morality and worth, as citizens in our Commonwealth these 
people are of us, children of some parents; they are a part of 
the organic whole, and should be treated as a Christian State 
must treat its people. 

Any effort to determine the blameable and unblameable in 
human affairs must be done by those with superhuman pre- 
rogatives. We do not claim to be able to judge mankind, and 
divisions as to worthiness, if they are to be finally drawn, must 
be made by others. However, in dealing with everybody we 
believe that a non-contributory old-age pensions system will 
have an edifying effect, — will be an incentive to good citizen- 
ship as a necessary requirement for qualification. 

There is a belief that the recent law passed in Massachusetts 
compelling children to support their destitute parents will, in 
large measure, reduce the need of old-age pensions. We do not 
agree with this idea, for we know that very few parents would 
desire to bring their children into court, knowing well that it 
would result in unpleasant relations with them. There are 
those who are unmarried, or who have no children, or whose 
children are not residents of the State, and, therefore, beyond 
the jurisdiction of our courts. The most unfair aspect of this 
law is that the children of our pensioners are not subject to its 
unpleasant provisions because of this class legislation, while the 
remainder of our citizens whose parents do not receive such 
pensions, but who provide the money which supplies these 
special-privilege pensions, are amenable to the penalties of this 
law. If this is not unfair class legislation, what is it? 



1917.] HOUSE — No. 1850. 75 

We dislike the condemning suggestion contained in this law 
that our people must be forced to do that which they would 
willingly do if they at all times had the means. We cannot 
consider the assumption that such a law will ever have the 
decent purpose that permits it to take the place of old-age 
pensions; and we further claim that every worthy man and 
woman, citizens of the Commonwealth, are entitled to the in- 
dependent protection of a pension, so that they shall not be 
under obligations or become burdens to relatives and friends. 
Whatever are the merits of such a law we are unwilling to allow 
our people to be stigmatized by it as lacking love and respect 
for their parents. We entirely disapprove the assumption that 
the enactment of a non-contributory old-age pensions law will 
lessen filial obligations, will lessen love for and protection of 
parents by their children. For we know that a pensions income 
for the aged, however small, would make both parents and 
children happier and keep them together. 

The saddest happening in the lives of sons and daughters is 
when they find themselves unable to protect their fathers and 
mothers because of the expense of their own immediate families, 
— the expenses of unemployment, sickness, and other exigencies 
which continually press upon them. It has been proved in 
countries where non-contributory old-age pensions are granted 
the aged parents that it has not lessened filial obligations, — 
respect for parents, — but, on the contrary, has made family 
ties stronger and happier. 

To show further that old-age pensions of the non-contributory 
plan in a great measure creates conditions which promote re- 
gard for parents instead of lessening it, we quote from the New 
Zealand Pensions Commissioner's report for 1905: — 

One phase of the old-age pensions scheme to which I desire to direct 
attention is that which has resulted in the improved relations between the 
younger generation and their aged parents. Prior to the introduction of 
the act it was with extreme difficulty that numbers of sons and daughters 
throughout the colony were able to make proper provision for the welfare 
of fathers and mothers who had reached the age when work was out of the 
question, and when in many instances the state of health demanded the 
utmost care and attention. This, though often ungrudgingly given, neces- 
sitated a great amount of self-denial and an added expenditure that could 
be ill afforded. Now, with the beneficent old-age pensions act on the 
statute book, the old order of things has been changed in many directions ; 



76 SOCIAL INSURANCE. [Feb. 

and with the change that has been brought to the home of many of our 
young colonists that measure of assistance which has been sufficient to lift 
them from drudgery, and, in some instances, want, to the realm of com- 
parative comfort. For, by means of the aid now given them by their aged 
parents in the shape of the pension, they have been freed from the evil 
which is perhaps the surest destroyer of their domestic happiness, namely, 
the anxiety created by the difficulty in providing the necessaries of life; 
and aged people now receive at the hands of "their children an amount of 
consideration which it was practically impossible for the latter to previously 
bestow. ... In many instances the freedom which has come to the 
younger generation has resulted in their sphere of influence in the world 
being enlarged, in that they now find themselves in position to marry, and 
are thus able to add to the wealth of the State be the bringing up of 
families. 

Thousands of our citizens know, full well the truth contained 
in this statement from New Zealand. Every condition spoken 
of in it has come home to everybody, and has been a cause of 
unhappiness and bitterness in many families, which non-con- 
tributory pensions would correct. 

It is impossible for us to see how the majority of the workers, 
try as they will and do, can save anything from their weekly 
wage after meeting the living expenses of the week, with the at- 
tendant incidentals due to sickness, unemployment and other 
causes. The average yearly wage in Massachusetts in 1913 in 
manufacturing industries gives approximately $10.95 a week. 
Let us increase this average weekly to $15 or $20, and then let 
us ask the workers, especially those with children, how they 
would find it possible to save after the costs of ordinary neces- 
saries of living have been met. We know it is impossible to 
save much, if anything, from such wages. 

To flaunt in the faces of those who have reached old age 
without means, after having struggled manfully and well 
through long years of painful self-denial in which they have 
been unable to save, the reproval, "You should have been 
thrifty," is inhuman mockery. 

Many of such opponents say the people should not spend so 
much on clothes, shoes, amusements, cigars, et cetera. Let us 
analyze this and see what would happen to the industry and 
the business of the community if such money of the masses 
were withdrawn from circulation and saved. First, we would 



1917.] HOUSE — No. 1850. -77 

meet the inevitable proof that general business would suffer, 
and the unemployment of the people who now depend upon 
employment in this general business would consequently result. 
This condition of affairs would ultimately reach the pockets of 
the very men who now advocate this false economy called 
thrift. Second, if this kind of thrift were practiced we would 
not be living according to American standards, for no real 
American standard could request, little less demand, that a 
supposedly free people live so penuriously as to deny them- 
selves the necessary pleasures and comforts that make life 
worth living in order to save a few pennies for old age. 

After considering the opposition of the objectors who dis- 
parage the non-contributory plan of pensions because they 
believe it will discourage thrift, we are convinced that such 
objections are not founded upon fact; and we are unwilling, 
therefore, to accept any stigmatic suggestion that our people, 
as a whole, are unthrifty. We know they often practice fru- 
gality to a painful degree, and we will not advocate that par- 
simony, which is unreasonable and excessive saving for the sake 
of saving at the expense of decent living conditions, be their 
practice. Nor do we believe it is the duty of the citizen to 
practice that miserliness which denies one's self and others the 
ordinary comforts, and even the necessaries, of life for the mere 
sake of hoarding money for old age. We know that thousands 
of our people must of necessity, and do, practice prudence and 
providence beyond reason and justice to themselves. It is, in 
fact, an ever-present wisdom obtained from the sad experience 
in the homes of the masses. The advocates of pseudo-thrift 
who advise people to be thrifty on small wages should change 
their term, for they misunderstand the real definition and sig- 
nificance of the word, which means the earning and saving with 
a view to wholesome and profitable expenditure at a proper 
time. This proper time is incessantly faced by the toiler whose 
weekly wage must often be expended upon those dependent 
upon him long before it is due, leaving him nothing to save for 
old age. Yet every dollar thus expended promotes the industry 
and the business of the Commonwealth. In this way is paid 
90 per cent, if not all of the taxes, directly and indirectly, 
which go into the treasury of the State. 



78 SOCIAL INSURANCE. [Feb. 

Will any one believe that he who saves selfishly and miserly 
for his own protection is of as much value to the community as 
he who, spending as he goes, even extravagantly, buys of the 
products of industry, thus contributing to the prosperity of 
all? It will readily be seen that while reckless extravagance is 
not praiseworthy it is of greater value to any community than 
the practice of the sordid greed of niggardliness. 

To show that thrift has not decreased in the United Kingdom 
during the period in which non-contributory pensions have been 
in operation, we quote the following figures from the sixty- 
second statistical abstract of the United Kingdom, which con- 
tains tables showing that thrift on the part of the working 
classes has not diminished since pensions became effective in 
1909. It is shown in this report that during the period of six 
years preceding Dec. 31, 1908, the number of depositors' ac- 
counts for the United Kingdom increased to 1,885,090, and the 
amount due depositors to £16,043,126, while during the six 
years following 1908 (year of pensions law enactment) the 
number of depositors' accounts increased to 2,496,563, and the 
amount due to depositors to £29,884,994, notwithstanding that 
the figures for the year ending Dec. 31, 1914, were affected by 
the war. 

Here is a very notable argument to repudiate the statement 
that old-age pensions discourage thrift. 

A claim is also made that "the people want something for 
nothing." If the people ever have, they have never received 
it, especially in the caring for those who need assistance in 
old-age. If it were not for the sadness of it, it would be hu- 
morous for us to continue working along the lines that will 
insure longevity, and then refuse to protect old people with 
pensions so that they may enjoy life to the end with some 
measure of comfort. 

Much fear has been expressed that if Massachusetts were to 
enact a pensions law residents of other States would come here 
and take up residence in order to receive its immediate benefits. 
This would be impossible, because any proposed pensions law 
should stipulate that an applicant must have been a resident of 
the Commonwealth for a term of years. 

A phase of industrial life which should not be forgotten in 



1917.] HOUSE — No. 1850. 79 

relation to the need of pensions is that the larger number of 
the working class in industry to-day is facing an efficiency test 
which was unknown a short while ago. High speed and intri- 
cate machinery demand from these workers a health-racking 
exactness that slowly destroys their physical stamina and well- 
being. It is a battle between the endurance powers of the 
human and the high speed and tremendous strength of mar- 
velous contrivances of steel. In this vitality-using contest the 
worker loses and becomes prematurely old, — unfitted to per- 
form his usual tasks at a much earlier period of life than 
formerly. 

The worker must alone and r unfairly bear the loss of his 
strength, of his failing eyesight, of his physical breakdown from 
his overtaxed and meager earnings. At this time of life the 
earning power of thousands of workers becomes lessened. They 
are no longer wanted in industry. They have honestly been 
unable to save for old age, and in middle life the great ma- 
jority of them feel the coming of the baneful prospects of 
degrading poverty. This is also true of thousands of workers 
in offices and in other businesses. Conse'quently, it has come 
to us, in the course of our investigation to protect the wage 
earner, that there should be something done to hold such 
people in industry who are passing middle life and are no 
longer able to meet the exacting requirements of their particular 
trade or work. 

We recommend that employers, labor unions and others 
study this question carefully, and devise some scheme whereby 
such workers may be employed in other departments of industry 
or civil business. To put upon the worker the whole, or even 
a partial, burden of the cost due to his physical incapacity 
under these circumstances is inhuman. This burden should be 
borne directly by the profits of industry that were made from 
this human wreckage, and the worker should be protected by 
some form of invalidity and age pensions without specific con- 
tributions by him. To test these observations let us con- 
fidentially approach, if you will, this type of citizen fifty years 
old, gray, not as active as before, but, withal, a good citizen 
who has lived with his family according to American standards, 
but who has not been a spendthrift. Ask him if he has been 



80 SOCIAL INSURANCE. [Feb. 

able to save anything, and invariably his answer will be no, for 
family expenses, happenings in life over which he had no con- 
trol, have taken it all. Then there is his good wife; she too 
has been unable to save. If this husband break down or lose 
his position, both are but a few weeks from need, from charity, 
or perhaps the poorhouse, unless they have children or other 
relations and friends who can help them. This fear, this worry 
which comes to thousands of our people is more destructive of 
humanity than many of the conditions and diseases for which 
we annually spend thousands of dollars to prevent. 

A few years ago the Commonwealth enacted a law "to 
provide for suitably aiding mothers with dependent children,' ' 
known as the widows' pension law. This act, like all other 
legislation of this character, is of the non-contributory type. 
When it was proposed, it was called paternalistic and socialistic, 
and was considered a mad attempt to make citizens provide for 
the support of widows and children not related to them. The 
cost of maintaining this act has increased enormously over the 
original estimate, yet every one is satisfied that it is a good law 
and serves a great purpose. Many of those who opposed it in 
the first instance are now agreed that it has proved its value. 

It has been suggested that the old-age pension is a Federal and 
not a State duty. This brings back the time-worn argument of 
State rights. We respect its moss-grown antiquity, but we 
refuse to be misled by such subterfugean Rip Van Winkleism. 
We feel it would be much more economical for Massachusetts to 
expend her own money within the Commonwealth than it would 
for her to pay the costs under a Federal law in which she would 
be obliged to bear in part a heavy burden of other States which 
have not an equal industrial wealth. It could be argued with 
equal justification that workmen's compensation and so-called 
widows' pensions, child labor and the restriction of hours of 
labor, are purely national and not State propositions, yet the 
Commonwealth has enacted such laws. 

There is already a system of contributory pensions in opera- 
tion for State employees, to which these employees and the 
Commonwealth contribute. Even here the masses of the people 
are paying out of the State's treasury towards the civil pensions 
of government employees, and yet they themselves are un- 
provided for in old age. 



1917.] HOUSE — Xo. 1850. 81 

Another reason for our advocacy of the so-called non-con- 
tributory old-age pensions system for our people is that we 
believe it will be found to be constitutional. 

This Commonwealth has already expended over $35,000 in 
investigating the subject of old-age pensions covered in the 
reports made in 1910 and 1914, and to this is to be added the 
expense of this Commission's work relating to the subject. For 
the Commonwealth to spend another dollar for investigations 
of any kind whatsoever without taking definite action in 
establishing an old-age pensions system would be little less than 
criminal expenditure of the people's money. It is now time for 
positive action in behalf of this great problem, and the people 
should not permit themselves to be humbugged by any claim 
that it is necessary to waste more time or more money in 
investigating this subject which has already been sufficiently 
investigated. 

Against the critics of the non-contributory old-age pensions 
system we place the following letters and statements from emi- 
nent statesmen who know how the non-contributory old-age 
pensions system has worked in their respective countries : — 

Prime Minister Asquith, Commons, 1911, said: — 

I think we were perfectly right not to adopt the principle of contribution 
in regard to old-age pensions, because I am satisfied — as I was then — 
that a system of old-age pensions based upon contribution would have been 
futile and a failure. 

Lloyd George, in 1912, when Chancellor of the Exchequer 
said : — 

After the first year, however, the popularity and success of that measure 
(non-contributory old-age pensions) was so firmly assured that at the last 
general election the worst accusation that any one could bring against a 
candidate was that he was in favor of tampering with that first great 
article in the Magna Charta of the poor. 

A. Bonar Law, now Chancellor of the Exchequer of England, 
says : — 

The old-age pensions scheme has, in my opinion, been very successful 
and beneficial. I am sure it would not be abandoned here, and I per- 
sonally strongly approve of it. 



82 SOCIAL INSURANCE. [Feb. 

Arthur Henderson, formerly chairman of the Board of Edu- 
cation of London, and now a member of the British Cabinet, 
sends the following: — 

In my opinion the introduction of old-age pensions (non-contributory) 
has been of the greatest benefit to the working people of this country. By 
relieving large numbers from the fear of destitution in their old age it has 
increased the happiness of the people at large. For this reason alone, 
apart from the subsidiary advantages, such as the strengthening of family 
ties and the removal of the much-dreaded stigma of pauperism, in my 
opinion it has been thoroughly worth the trial. I see no reason to suppose 
that it has discouraged thrift, and I am quite sure that of the various social 
reforms which have been introduced in the last ten years this is one of the 
last which our people would allow to be repealed. 

Phillip Snowden, M.P., had this .to say in 1916: — 

No legislative act ever passed in this country has been so popular as the 
old-age pensions act. One never hears a word of criticism of it, and those 
who opposed its enactment never hint at opposition to it. The act could 
not be repealed. No such suggestion has been made from any quarter. 
No parliamentary candidate would ever dream of suggesting its repeal. 
Mr. Lloyd George has xiever repudiated the act. It has been the greatest 
boon ever conferred on the old folks in this country. It has made con- 
siderable economies in the cost of the poor-law system, as old people can 
now live with relatives and friends who formerly had to go inside the 
poorhouse. 

From John Redmond, M.P., comes this letter: — 

Old-age pensions have made the people happier; they have not become 
thriftless because of it; and it has been a great boon, not only to old people 
of seventy years of age and over, but also to their families and to the 
community in general. 

From F. Herbert Stead, M.A., of London, we receive the 
following: — 

As you know, the position I have occupied and occupy has enabled me 
to come into touch with the old people most recently in our agitation for 
national old-age homes in different parts of the country. Everywhere 
there seems to be no consciousness or even a hint of pauper taint attaching 
to the old-age pensions. 

People look forward with hope and joy to the time when they shall 
receive their pension. They used to look forward with horror and despair 



1917.] HOUSE — No. 1850. 83 

to the time when they would have to receive poor-law relief. The attempts 
of a very small minority, who were "in principle opposed to old-age 
pensions/' to "crab" and disparage pensions and regard them as merely 
another form of poor-law relief only throw into stronger relief the national 
unanimity of satisfaction with the moral as well as the social relief of 
old-age pensions. 

Sydney Webb, widely known authority and writer on eco- 
nomic subjects and member of the Fabian Society of England, 
says: — 

The old-age pensions act has by universal testimony been an unqualified 
success, a pure gain with almost no drawbacks. Fraud has been very small 
(and then only venial). . . . The experience of New Zealand and Aus- 
tralia has been the same, and the number of paupers over seventy years 
has been enormously reduced; there are now hardly any outdoor paupers 
over seventy, whilst of the indoor paupers there remain only the chron- 
ically sick or feeble-minded or incapable, to whom the workhouse is a 
home of rest. 

No political party would dare to suggest repealing the act; in fact, 
no one has ever done so. 

Arthur M. Myers, Minister of Pensions for New Zealand, 
wrote on July 24, 1916: — 

I think there is little doubt but that the great bulk of the community 
is satisfied that the provision made by Legislature is one that is of very 
great benefit to that section of the people, who, through force of circum- 
stances, in their old age are dependent upon others for their support. 

As to the sentiment of the people, for or against the law, and the possi- 
bility of its being repealed, I think I am safe in saying that there are no 
set of circumstances that I can conceive where a demand would be made 
for denying the old people the pension, which has now been payable since 
the year 1898. 

F. W. Ross, Assistant Commissioner of Pensions for the Com- 
monwealth of Australia, adds his approval thusly : — 

The relief extended by the pensions act is widely appreciated, and the 
operation of the act has given general satisfaction. 

To these opinions could be added numbers of others, but 
space does not permit, and our citizens should go very carefully 
before decrying the efficiency of the non-contributory old-age 
pensions system. They should at all times, when they desire 



84 SOCIAL INSURANCE. [Feb. ■ 

such laws, instruct their representatives and senators and other 
officers of government to carry out their expressed wishes. 

When Lloyd George and former Premier Herbert H. Asquith 
and other able men of the United Kingdom were advocating the 
humanitarianism of old-age pensions every conceivable state- 
ment was made against its value and necessity, — statements 
similar to those we are now hearing here, and among them is 
the erroneous claim that it will ruin our prosperity, a claim that 
was used by those who opposed the measure in England. But 
practical experience in Great Britain has not justified the claim, 
but has shown distinctly that the assumption is not in accord- 
ance with fact. 

Lloyd George, in his second budget speech in 1910, testified 
to the fallacy of such argument in these words : — 

It looks as though this rich and powerful Nation, after the exceptional 
provisions it has been making for the needy and unfortunate, has been 
blessed with greater prosperity than it has ever attained in the whole 
history of its commercial greatness. 

This expression is significant. It tells us tersely that Nations 
prosper as they guard and care for the children of God, the 
children of men; so shall we prosper as we care for and protect 
our people in their old age. 

In arriving at these conclusions we have given thought to all 
the trivial objections against non-contributory old-age pensions 
that tended to belittle the wage earners — the great industrial 
army — and the mothers in the homes, and we cast them aside 
as erroneous and inane as compared with the nobler justice 
and higher humanitarian aims which are centered in the pen- 
sions system that will protect our people from the want, the 
degradation and the shame of pauperism in old age. 

We ask, what imagination can conjure a fitting emblem for 
these heroes of toil who have been touched by the Master-hand, 
which has placed upon their brows the wreath o: courage and 
valor, — a courage that would take the test with any hero of 
any battle line; a valor born in these God-fearing toilers, who 
love their families and heroically sacrifice all for them in the 
battle of life? Can a mere protection of a non-contributory 
old-age pensions system by the State — by the people as a ^ 



1917.] HOUSE — No. 1850. 85 

whole — ever be a compensating reward for this heroism, this 
valor, this courage; for these difficult, and at times heart- 
rending, struggles against great odds which the masses of the 
people have silently and uncomplainingly borne in their years 
of great contributions to the development and prosperity of 
this Commonwealth? 

We submit for your consideration a compiled old-age and 
invalidity pensions act, as follows: — 

Ax Act to peotect Citizens of the Commonwealth from Want in 
Old Age, Invalidity or Disability, by Right of Citizenship; 
and to conserve and promote their health, happiness and 
Prosperity. 

Part I. — Old-age Pensions. 
Statutory Conditions. 
Section 1. (1) Every person (woman or man) in whose case the 
conditions laid down by this act for the receipt of an old-age pension 
(in this act referred to as statutory conditions) are fulfilled, shall be 
entitled to receive such a pension under this act so long as those con- 
ditions continue to be fulfilled, and so long as she or he is not disqualified 
under this act for the receipt of the pension. 

(2) An old-age pension under this act shall be at the rate set forth in 
the schedule to this act, section thirteen. 

(3) The sums required for the purposes of this act or its administration 
shall be paid out of moneys provided as required by the general court 
from taxes from intangible personalty (certain .stocks, bonds, etc., further 
described in the tax commissioner's report, 1 or from any other taxable 
property. 

(4) The receipt of an old-age pension under this act shall not deprive 
the pensioner of any franchise, right, or privilege, or subject her or him 
to any disability. 

Section 2. The statutory conditions for the receipt of an old-age 
pension are — 

(1) The person, if a woman, must have attained the age of sixty; if a 
man, must have attained the age of sixty-five. 

(2) A person shall be deemed to have attained the age of sixty or sixty- 
five on the commencement of the day previous to the sixtieth or sixty- 
fifth anniversary, as the case may be, of the day of her or his birth. 

(3) The person must satisfy the pension authorities that for at least 
twenty years up to the date of the receipt of any sum on account of a 
pension she or he has been a citizen of the commonwealth, and that 
for at least fifteen years in the aggregate up to the date of the receipt of 

» House 2290, 1913. 



86 SOCIAL INSURANCE. [Feb. 

any sum on account of a pension she or he has had her or his residence 
in the commonwealth: provided., that for the purpose of computing the 
fifteen years' residence in the commonwealth under this provision — 

(a) Any period spend abroad in any service of the United States, the 
remuneration for which is paid out of moneys provided by the national 
government, or as the wife or servant of a person in any such service 
so remunerated; and 

(b) Any periods spent abroad by any person during which that person 
has maintained or assisted in maintaining any dependent in the com- 
monwealth; and 

(c) Any period of temporary absence not exceeding three months in 
duration at any one time — shall be counted as residence in the com- 
monwealth. 

(4) The condition as to nationality imposed by paragraph three of 
this section two shall not be required to be fulfilled in the case of a woman 
who satisfies the pension authorities that she would, but for her marriage 
with an alien, have fulfilled the condition, and that, at the date of a 
receipt of any sum on account of a pension, the alien is dead, or 
the marriage with the alien has been dissolved or annulled, or she has, 
for a period of not less than two years up to the said date, been legally 
separated from, or deserted by, the alien. 

(5) The person must satisfy the pension authorities that her or his 
yearly means as calculated under this act do not exceed three hundred 
and sixteen dollars. 

Disqualifications . 
Section 3. (1) A person shall be disqualified for receiving or con- 
tinuing to receive an old-age pension under this act, notwithstanding the 
fulfillment of the statutory conditions — 

(a) While she or he is in receipt of any poor relief (other than relief 
excepted under this provision), and until the first day of July, nineteen 
hundred and eighteen, unless the general court otherwise determines, if 
she or he has at any time since the first day of January, nineteen hundred 
and seventeen, received or hereafter receives, any such relief: provided, 
that for the purposes of this provision ■ — 

Any medical or surgical assistance (including food or comforts) supplied 
by or on the recommendation of a medical officer; or 

Any relief given to any person by means of the maintenance of any 
dependent of that person in any lunatic asylum, infirmary or hospital, 
or the payment of any expenses of the burial of a dependent; or 

Any relief (other than medical or surgical assistance, or relief herein- 
before specifically exempted) which by law is expressly declared not to 
be a disqualification or a reason for depriving any person of any franchise, 
right, or privilege ■ — shall not be considered as poor relief. 

(b) If, before she or he becomes entitled to a pension, she or he has 
habitually failed to work according to her or his ability, opportunity, 



1917.] HOUSE — No. 1850. 87 

and need, for the maintenance or benefit of herself or himself and those 
legally dependent upon her or him: provided, that a person shall not be 
disqualified under this paragraph if such person has continuously for 
ten years up to the attaining of the age of fifty, if a woman, or fifty-five, 
if a man, by means of payments to any corporation, society or trade 
unions, or other approved steps, made such provision against old age, 
sickness, infirmity, or want from loss of employment as may be recognized 
as proper provisions for the purpose by regulations under this act; and 
any such provision, when made by the husband in the case of a married 
couple living together, shall as respects any right of the wife to a pension, 
be treated as provision made by the wife as well as by the husband. 

(c) While she or he is detained in any asylum of the commonwealth's, 
or while she or he is being maintained in any place as a needy poor or 
criminal lunatic. 

(d) During the continuance of any period of disqualification arising 
or imposed in pursuance of this section in consequence of conviction for 
an offence. 

(e) Any rule of law and any enactment, the effect of which is to cause 
relief given to or in respect of a wife or relative to be treated as relief 
given to the person liable to maintain the wife or relative, shall not have 
effect for the purpose of this section. 

(2) Where a person has been, before the passing of this act, or is, 
after the passing of this act, convicted of any offence, and ordered to be 
imprisoned without the option of a fine or to suffer any greater punish- 
ment, she or he shall be disqualified for receiving or continuing to receive 
an old-age pension under this act while she or he is detained in prison in 
consequence of the order, and for a further period, not exceeding three 
years, after the date on which she or he is released from prison, if the 
court so directs: provided, Jiowever, that in cases where the term by which 
a person has been ordered to be imprisoned without the option of a fine 
does not exceed six weeks, one year shall be substituted for three years 
as the further maximum period of disqualification. 

(3) Where a person, woman of sixty or upwards, or a man of sixty-five 
years of age or upwards, having been convicted or committed before any 
court is liable to have a detention or commitment order made against 
her or him as one needing medical or other attention or examination, 
and is not necessarily, by virtue of the provisions of this act, disqualified 
for receiving or continuing to receive an old-age pension under this act, 
the court may, if it thinks fit, order that the person convicted be so dis- 
qualified for such period, not exceeding three years, as the court directs. 

(4) Any person in receipt of an old-age pension who is convicted as an 
inebriate shall be disqualified for receiving or continuing to receive an 
old-age pension for a period of three months after the date of her or his 
conviction, unless the court before whom she or he is convicted directs 
to the contrary. 



88 SOCIAL INSURANCE. [Feb. 



Calculation of Means. 
Section 4. (1) In calculating the means of a person for the purpose 
of this act account shall be taken of — 

(a) The yearly value of any property (not being property personally 
used by her or him) which is invested, or otherwise put to profitable use, 
by her or him, or which, though capable of investment or profitable use, 
is not so invested or put to profitable use by her or him, the yearly value 
of that property being taken to be one-twentieth part of the capital 
value thereof. 

(b) The income which that person may reasonably receive during the 
succeeding year in cash, excluding any sums receivable on account of an 
old-age pension under this act and excluding any sums arising from the 
investment or profitable use of property (not being personally used or 
enjoyed by her or him), that income, in the absence of other means for 
ascertaining the income, being taken to be the income actually received 
during the preceding j^ear. 

(c) The yearly value of any advantage accruing to that person from 
the use or enjoyment of any property, or of a life interest or annuity, be- 
longing to her or him which is personally used or enjoyed by her or him, 
except furniture and personal effects in a case where the total value of 
the furniture and effects does not exceed three hundred and fifty dollars, 
the yearly value of that property being taken to be one-twentieth part 
of the capital value thereof. 

(d) The yearly value of any benefit or privilege enjoyed by that person, 
except board and lodging voluntarily allowed by relatives: provided, that 
where under paragraphs (a) and (c) of this section the yearly value of any 
property is taken to be one-twentieth part of the capital value thereof, 
no account shall be taken under any other of those provisions of an^r 
appropriation of that property for the purpose of current expenditure. 

(2) In calculating the means of a person being one of a married couple 
living together in the same house, the means shall be taken to be half 
the total means of the couple. 

(3) If it appears that any person has directly or indirectly deprived 
herself or himself of any income or property in order to qualify herself o'r 
himself for the receipt of a pension, or for the receipt of an old-age pension 
at a higher rate than that to which she or he would otherwise be entitled 
under this act, that income or the yearly value of that property shall, 
for the purposes of this section, be taken to be part of the means of that 
person. 

Time of Payment. 
Section 5. (1) An old-age pension under this act, subject to any 
directions of the commissioner and of the treasurer of the commonwealth 
in special cases, shall be paid weekly in advance in such manner and 
subject to such conditions, as to identification or otherwise, as the treas- 
urer and the commissioner direct. 



1917.] HOUSE — No. 1850. 89 

(2) A pension shall commence to accrue on the first Friday after the 
claim for a pension has been allowed, or, in the case of a claim provision- 
ally allowed, on the first Fridaj' after the day on which the claimant 
becomes entitled to receive the pension. 

(3) After the first day of March, nineteen hundred and eighteen, the 
central pension authority shall, if the facts warrant, 'date a pension back 
to, but not beyond, the date of claim, application or question of a person. 

(4) A sum shall not be paid on account of an old-age pension — 
(a) To any person while absent from the commonwealth; or 

(6) If payment of the sum is not obtained within three months after 
date of which it has become payable. 



Non-assignment. 
Section 6. Every assignment of or charge on, and every agreement 
to assign or charge, an old-age pension under this act shall be void, and, 
on the bankruptcy of a person entitled to an old-age pension, the pension 
shall not pass to an}'' trustee or other person acting on behalf of the 
creditors. 

Claims for Pensions. 
Section 7. (1) All claims for old-age pensions under this act, and 
all questions whether the statutory conditions are fulfilled in the case 
of any person claiming such a pension, or whether those conditions con- 
tinue to be fulfilled in the case of a person in receipt of such a pension, or 
whether a person is disqualified for receiving or continuing to receive a 
pension, shall be considered and determined as f ollows : — 

(a) Any such claim shall stand referred to the local pension com- 
mittee, and the committee shall (except in the case of a question which 
has been originated by the pension officer, and on which the committee 
had already his report), before considering the claim or question, refer 
it for report and inquiry to the pension officer. 

(b) The pension officer shall inquire into and report upon any question 
or claim so referred to him, and the local pension committee shall, on 
the receipt of the report of pension officer, and after obtaining from him 
or from any other source if necessary any further information as to claim 
or question, consider the case and give their decision upon the claim or 
question. 

(c) The pension officer or any person aggrieved may appeal to the 
central pension authority against the decision of the local pension com- 
mittee allowing or refusing a claim for pension or determining any question 
referred to them within the time and in the manner prescribed by regula- 
tions under this act, and any claim or question in respect of which an 
appeal is so brought shall stand referred to the central pension authority, 
and shall be considered and determined by such authority. 

(d) If any person is aggrieved by the refusal or neglect of a local pension 
committee to consider a claim for a pension, or to determine any question 



90 SOCIAL INSURANCE. [Feb. 

referred to them, that person may apply in the prescribed manner to the 
central pension authority, and that authority may, if it considers that 
the local pension committee have refused or neglected to consider and 
determine the claim or question within a reasonable time, consider and 
determine the claim or question in the same manner as on an appeal 
from the decision from the local pension committee. 

(2) The decision of the local pension committee on any claim or ques- 
tion which is not referred to the central pension authority, and the de- 
cision of the central pension authority on any claim or question which is 
so referred to them, shall be final and conclusive.. 



Pension Authorities. 
Section 8. (1) The local pension committee shall be a committee 
appointed for every county from the citizens of such county. 

(2) A local pension committee may appoint such and so many sub- 
committees, consisting either wholly or partly of the members of the 
committee, as the committee think fit, and a local pension committee 
may delegate, either absolutely or under such conditions as they see fit, 
to any such subcommittee any powers and duties of the local pension 
committee under this act. 

(3) The central pension authority shall be the insurance commissioner 
of the commonwealth, and the commissioner may act through any such 
committee, persons, or person appointed by him, with the consent of the 
governor and council, as he thinks fit. 

(4) Any reference in this act to pension authorities shall be construed 
as a reference to the pension officer, the local pension committee, and the 
central pension authority, or to any one of them, as the case requires. 



False Representation. 

Section 9. (1) If, for the purpose of obtaining or continuing an old- 
age pension under this act, either for herself or himself or for any other 
person, or for the purpose of obtaining or continuing an old-age pension 
under this act for herself or himself or for any other person at a higher 
rate than that appropriate to the case, any person knowingly makes a 
false statement or false representation, she or he shall be liable on con- 
viction to imprisonment for a term not exceeding six months. 
' (a) Any court shall, however, have the power, in the case of a person 
convicted of an offence under subsection (1) of this section, to impose a 
fine not exceeding one hundred dollars instead of imprisonment, if it 
thinks that the justice of the case would be better met by a fine than by 
imprisonment. 

(2) If it is found at any time that a person has been in receipt of an 
old-age pension under this act while the statutory conditions were not 
fulfilled in her or his case, or while she or he was disqualified for receiving 



1917.] HOUSE — No. 1850. 91 

the pension, she or he, or, in the case of her or his death, her or his personal 
representative (if such personal representative becomes entitled to any 
sum or sums as a personal representative), shall be liable to repay to the 
treasurer of the commonwealth any sums paid to her or him in respect of 
the pension while the statutory conditions were not fulfilled, or while 
she or he was disqualified for receiving the pension, and the amount of 
those sums may be recovered as a debt due the commonwealth. This 
section shall also apply, with necessary modifications, to cases where an 
old-age pension is received at a higher rate than that appropriate to the 
case, as it applies to cases where a person has been in receipt of an old- 
age pension while the statutory conditions were not fulfilled. 

(a) Any decision of the local pension committee under section seven 
on any question which is not referred to the central pension authority, 
and the decision of the central pension authority on any question which 
is referred to them under that section, shall be conclusive proof of any 
matters decided by the committee or the authority. 

(b) A copy of a decision of the local pension committee or central 
pension authority, if authenticated in manner provided by regulations 
to be made for the purpose under section eleven, shall be received in 
evidence. 

(3) Where any person who is in receipt of an old-age pension is liable 
to repay to the treasurer of the commonwealth any sums under this 
section in consequence of the finding of a local pension committee, or of 
the central pension authority in the case of a question referred to them, 
the treasurer shall be entitled, without prejudice to his powers under sub- 
section (2) of this section, to direct the deduction of those sums from 
any sums to which that person becomes entitled on account of an old- 
age pension, in manner to be provided by regulations to be made for the 
purpose under section eleven of this act. 



Questions as to Pension Rate. 
Section 10. (1) It is hereby declared that a question may be raised 
at any time as to ■ — 

(a) Whether at any time or during any period a person has been in 
receipt of an old-age pension when the statutory conditions were not 
fulfilled, or when he was disqualified for receiving the pension; and 

(b) Whether a person has been at any time or during any period in 
receipt of a pension at a certain rate when his means exceeded the amount 
which justified the payment of a pension at that rate, and, if so, at what 
rate the pension, if any, should have been paid; and 

(c) Whether a person who is in receipt of a pension at a certain rate is, 
having regard to his means, entitled to a pension at a higher or a lower 
rate, and, if so, at what rate the pension, if any, should be paid; 

and that an application may be made at any time to alter or revoke a 
provisional allowance of a claim for a pension. 



92 SOCIAL INSURANCE. [Feb. 

(2) Section seven of this act shall apply to any such question or appli- 
cation as it applies to the questions mentioned in that section. 

(3) Any such question may be raised notwithstanding that the de- 
cision of the question involves a decision of the local pension committee 
or central pension authority, as the case may be; but where by a later 
decision a former decision is reversed, a person who has received any 
sums on account of an old-age pension in accordance with the former 
decision shall, notwithstanding anything in subsection (2) of section 
nine, in the absence of any fraud on his part, be entitled to retain any 
sum so received up to the date of the later decision which he would have 
been entitled to retain but for the reversal of the former decision. 

(4) Where a question is raised as to the disqualifications of a person 
to receive an old-age pension, and it is alleged that the disqualification 
has arisen since the person has been in receipt of the pension, and that 
the disqualification is continuing at the time the question is raised, or, 
if it has ceased, has ceased less than three weeks before that time, the 
payment of the pension shall be discontinued, and no sum shall be paid 
to the pensioner on account of the pension after the date on which the 
question is raised: -provided, that if the question is decided in favor of 
the pensioner she or he shall be entitled to receive all sums which would 
have been payable to her or him if the question had not been raised. 

(5) If the decision on any question involves the discontinuance of an 
old-age pension, or the reduction of the rate at which the pension is 
paid, or if, in a case where the payment of the pension has been dis- 
continued on the raising of the question, the question is not decided in 
favor of the pensioner, the person in respect of whose pension the decision 
is given shall not be entitled to receive a pension or to receive a pension 
at a rate higher than that determined by the committee or authority, as 
the case may be, notwithstanding any change of circumstances, unless 
she or he makes a fresh claim for the purpose and the claim is allowed, or, 
in a case where she or he alleges that she or he is entitled to receive a 
pension at a higher rate, raises a question for the purpose and the pen- 
sion is allowed at a higher rate. 



Administration, Rides and Regulations. 

Section 11. (1) The governor and council, in conjunction with the 
insurance commissioner (central pension authority), may make regula- 
tions as needed for carrying this act into effect, and in particular — 

(a) For prescribing the evidence to be required as to the fulfillment 
of statutory conditions; and 

(6) For prescribing the manner in which claims to pensions may be 
made and where paid, and the procedure to be followed on the con- 
sideration and determination of claims and questions to be considered 
and determined by pension officers and local pension committees, or by 
the central pension authority, and the mode in which any pension may 



1917.] HOUSE — No. 1850. 93 

be raised as to continuance, in the case of a pensioner, of the fulfillment 
of the statutory conditions, and as to the disqualifications of a pensioner; 
and 

(c) As to the appointment of, number, quorum, term of office, and 
proceedings generally of the local pension committee, and the appoint- 
ment of pension officers, and the use by the committee, with or without 
payment, of any offices, and the provision to be made for the immediate 
payment of any expenses of the committee, pension officers, or other 
details necessary to carry out the provisions of this act, and which are 
ultimately to be paid by the commonwealth. 

(2) The regulations shall provide for enabling claimants to obtain in- 
formation as respects old-age pensions under this act through city or 
town clerks; and for provisionally allowing claims to pensions before 
the date on which the claimant will become actually entitled to a pension; 
and for notice being given by registrars of births and deaths to the pen- 
sion officers or local pension committees of eveiy death of a woman over 
sixtjr and of a man over sixty-five registered by them, in such manner 
and subject to such conditions as may be laid down by the regulations; 
and for making the procedure for considering and determining on any 
claim for a pension or question with respect to an old-age pension under 
this act as simple as possible. 

(3) Any expenses incurred by the insurance commissioner or in carry- 
ing this act into effect shall be defrayed out of the moneys provided by 
the general court. 

When entitled to Pensio?i. 

Section 12. (1) A person shall not be entitled to the receipt of a 
pension under this act until the first day of January, nineteen hundred 
and eighteen, and no such pension shall begin to accrue until that day. 

(2) This act may be cited as the Old-age and Invalidity Pension Act 
of 1917. 

Pension Rate. 
Section 13. Schedule: • — 



Means of Pensioner. 


Rate of 

Pension per 

Week. 


Where the yearly means of the pensioner as calculated under this act — 

Do not exceed $212 

Exceed $212, but do not exceed $238, 

Exceed $238, but do not exceed $264, 

Exceed $264, but do not exceed $290, 

Exceed $290, but do not exceed $316, 

Exceed $316, 


$2 50 

2 00 

- 1 50 

1 00 

50 

No pension. 



94 SOCIAL INSURANCE. [Feb. 

Pakt II. — Invalid Pensions. 
Condition. 
Section 14. (1) Subject to this act, every person above the age of 
twenty years, who is permanently incapacitated for work by reason of 
an accident or by reason of his being an invalid, and who is not receiv- 
ing an old-age pension, shall, while in this commonwealth, be qualified 
to receive an invalid pension. 

(2) Subject to this act, every permanently blind person, above the 
age of twenty years who is not qualified under subsection (2) of this 
section to receive an invalid pension, and who is not receiving an old- 
age pension, shall, while in this commonwealth, be qualified to receive 
an invalid pension. 

(3) Aliens shall not be qualified to receive an invalid pension. 

(4) No person shall receive an invalid pension unless — 

(a) She or he is residing in the commonwealth on the date when she 
or he makes her or his claim to the pension. 

(b) She or he has on that date resided in the commonwealth con- 
tinuously for at least twenty years. 

(c) She or he has, while in this commonwealth, become permanently 
incapacitated or blind. 

(d) The accident or invalid state of health was not self-induced, nor 
in any way brought about with a view to obtaining a pension. 

(e) She or he has no claim against any employer, company, corporation, 
or other person, or body, compellable under private contract or law to 
adequately maintain or compensate him on account of accident or in- 
valid state of health. 

(/) Her or his relatives, namely, father, mother, husband, wife, or 
children do not, individually or collectively, adequately maintain her or 
him. 

(5) For the purpose of an invalid pension, a person who is afflicted 
with a congenital defect, and who is rendered permanently incapacitated 
or blind thereby, shall be regarded as having become permanently in- 
capacitated or blind while in the commonwealth if she or he was brought 
into the commonwealth before attaining the age of three years. 

Amount of Pension. 

Section 15. (1) The amount of an invalid pension shall in every 
case be determined by the schedule of means and pension amount allowed 
thereunder in section thirteen of this act, but the pension authorities 
shall determine each amount of pension, having regard to any contribu- 
tion made to her or his maintenance, and having regard to her or his 
having received compensation from any source in respect of any injury. 

(2) The pension authorities shall in the case of invalidity, and also 
in the case of accident where the permanent incapacity for work is not 



1917.] HOUSE — No. 1850. 95 

manifest, direct an examination of the claimant to be made by a duly 
qualified medical practitioner, who shall certify whether in his opinion 
the claimant is permanently incapacitated for work, and shall state the 
grounds upon which his opinion is founded: provided, that the examina- 
tion may be dispensed with if the claimant resides in a place remote 
from any duly qualified medical practitioner, or, where medical testi- 
mony conflicts, the pension authorities shall have the power to decide 
the application. 

Part III. — Public Trustee. 

Section 16. (1) Where any person who otherwise would be entitled 
to a pension under this act is the owner of the property on which she or 
he resides, she or he may convey or transfer the same to the central 
pension authority, who shall hold the same as a public trustee, and who 
shall deal with such property as directed by the rules and regulations to 
be made for such purposes under section eleven of this act, and all pro- 
visions of this act, where applicable, shall apply to this section and such 
property or pension as shall come under this section. 

(2) The property so conveyed or transferred shall not be deemed to 
form part of the accumulated property of the pensioner for the purposes 
of this act. 

(3) The pension authorities shall permit the pensioner or pensioners to 
reside on the property rent free during life, and if the pensioner dies 
leaving a wife or husband who is also entitled to a pension, the survivor 
shall be entitled so to reside on the said property for life. 

(4) While the pensioner or survivor aforesaid so resides she or he 
shall maintain the premises in good and substantial repair, and shall pay 
all taxes and other rates payable thereon. 

(5) On the death of the pensioner or of the survivor aforesaid, or where 
, from any cause the pensioner is no longer entitled to a pension, the central 

pension authority shall sell the property, and out of the proceeds thereof 
shall (after deducting the commission payable, to be defined under section 
eleven of this act) refund to the treasurer of the commonwealth so much 
'of the pension paid to such pensioner or pensioners since the date of the 
conveyance or transfer as but for the operation of this section would 
not have been payable, together with interest thereon at the rate of 
four per centum per annum, and shall pay the balance, if any, to the 
person or persons entitled thereto: provided, that if at any time the 
pensioner or survivor aforesaid so desires, the central pension authority 
shall, on the payment of so much of the pension so paid as aforesaid, 
reconvey or transfer the property to the applicant or said survivor, as 
the case may be, and thereafter the value of the property shall not be 
deducted from the capital value of the accumulated property of the 
pensioner as aforesaid, and her or his pension shall be adjusted accord- 
ingly. 

(6) Notwithstanding anything in the last preceding subsection, on the 



96 SOCIAL INSURANCE. [Feb. 

death of the pensioner or of the survivor as aforesaid, the central pension 
authority shall, on the application of the person or persons who would 
have been entitled to said property if it had not been so convej^ed or 
transferred as aforesaid, and on payment by the applicant to the central 
pension authority of the amount of pension so paid in excess of the amount 
which would have been payable had no such convej^ance or transfer 
been made, and also on payment of the amount of interest and com- 
mission as aforesaid, convey or transfer the property to said applicant. 
(7) Upon the receipt of any moneys under the preceding subsections of 
this section the central pension authority shall forthwith pay the same 
to the treasurer of the commonwealth. 



Part IV. — Old-age Pension Fund. 

Section 17. (1) The commonwealth shall establish an old-age 
pension fund to be open forever, to receive contributions, gifts, escheats, 
unclaimed savings, bequests and any other form of property or money 
to be used for the purposes of this act. 

(2) The treasurer of the commonwealth shall be the custodian of any 
property or moneys received under this act, subject to the direction of 
the central pension authority as directed by the rules and regulations to 
be made for such purposes under section eleven of this act. 

(3) In order to have it known that this fund has been established, the 
central pension authority shall, from time to time, each year, advertise 
it in a fitting manner in some of' the various newspapers in the common- 
wealth. 

WENDELL P. THORE. 

EDNA LAWRENCE SPENCER. 

EDWARD G. MORRIS. 



1917.] HOUSE — No. 1850. 



STATEMENT OF ALLISON G. CATHERON, FRANK S. FARNS- 
WORTH AND HARRY C. WOODILL. 

The undersigned members of the Commission are satisfied 
that the time is not ripe for the adoption of any system of old- 
age pensions in Massachusetts. In this conclusion we agree 
with the majority of two previous commissions which have 
studied the subject on behalf of this Commonwealth. While 
there is evidence of widespread desire for a system of non- 
contributory old-age pensions among those who would at once 
or soon become the beneficiaries of such a system, and while 
this desire is not altogether confined to such prospective bene- 
ficiaries, there does not appear to us to exist any such wide- 
spread need. Little evidence was presented to the Commission 
of actual suffering on account of poverty in old age, though we 
are ready, of course, to admit that some such suffering exists. 
The present system of institutional care or outdoor relief is 
admittedly adequate to meet this suffering, so far as it is a mere 
physical problem, but the argument is made that the citizen 
in old age should not be the subject of pauper relief. There is a 
natural sympathy with this point of view which we ourselves 
feel, yet to grant relief in the form of a pension to all aged poor 
is but to change the name, perhaps the extent, of relief, but 
not its real character. It would be much simpler tp provide 
merely that aged persons receiving outdoor relief should not be 
deemed paupers, and to make existing ■ relief more nearly ade- 
quate in individual cases. Nearly all proposers of non-contribu- 
tory old-age pensions systems recognize that in order to dif- 
ferentiate them from mere outdoor relief plans some elements 
of merit or service must be recognized in granting the pension. 
The distinctions made are usually of the slightest character. 
We are not ready to admit that merely to have arrived at a 
needy old age without having spent a portion of one's life in 
the prison or almshouse demonstrates such merit as to entitle 
one to public support, through a pension. Nor do we believe 
it possible to attach to any general non-contributory old-age 
pension system such standards as to secure in actual enforce- 
ment a recognition of real service to the State. The politi- 



98 SOCIAL INSURANCE. [Feb. 

1 

cal temptation to remove embarrassing conditions is very 
great, and the task of drawing into practice distinctions as to 
merit is equally difficult. We are told by the proponents of 
such legislation that pensions are to be granted only to the 
deserving poor. If we are inclined to adopt such a system, it 
is worth while remembering the remark of a certain State 
senator to members of this Commission: "I should like to see 
the man with courage enough to tell any of my constituents 
that they are not deserving." 

If we are to have non-contributory old-age pensions, let us 
recognize frankly that we are adopting a general and expensive 
system of public relief for the aged poor. Such a system will 
be in small degree a substitute for existing institutional care. 
Such care is seldom given except where custody is needed on 
account of mental, moral or physical infirmities. 

Of the 189,000 persons over sixty-five years of age in Massa- 
chusetts it is impossible to tell how many will qualify under 
any pension law. They will not be those in our institutions, 
but will include those now receiving outdoor relief, and many 
of those now supported in whole or in part by relatives or by 
their own exertions. Assumptions are of little value except to 
enable us to realize some of the possible costs of the system. 
If one-half of the individuals over sixty-five come under the 
law, and each of these 94,500 persons receives a pension of 
$150, not an extravagant assumption, the yearly cost will be 
$14,175,000. This amount would add greatly to the comfort 
and sense of security of many inhabitants of the Common- 
wealth, but such a result, however sufficient as an incentive to 
individual benevolence, is not in our opinion a sufficient reason 
for the appropriation of public funds. It is merely to adopt 
Robin Hood's method of robbing the rich to give to the poor, 
or, more precisely, robbing by taxation the industrious and 
thrifty, whether poor or rich, and giving to those who have 
need. 

It may be that at some time conditions will exist which will 
require such a general system of public relief, even at the risk 
of handicapping the industries of the Commonwealth with a 
great burden of taxation. To us it seems wiser at present to 
devote public efforts to the prevention of the conditions which 



1917.] HOUSE — No. 1850. 99 

call for such relief. Means of lessening unemployment,- of im- 
proving the public health, of relieving citizens from the economic 
burdens of sickness, of securing proper vocational education, of 
encouraging thrift, and like measures which will enable the 
industrious worker in much greater degree to provide for his 
own old age, are to our mind of more immediate importance. 
When a pension system is to be adopted it seems to us wiser 
that a contributory system be chosen. Such a plan may be 
regarded as an assisted system of savings. Those who advocate 
non-contributory old-age pensions can hardly object to the 
State's contribution to a contributory pension system. Others 
will find ground for supporting the State's share as a means of 
encouraging thrift and assisting industrious effort, for one of 
the greatest advantages of the contributory system is that it 
makes a sure distinction between the worker and the shirker. 
Modern industrial conditions have their part in aging the 
worker before his time. The employer finds it to his advantage 
not to retain the aged in industry. Both this responsibility and 
this advantage are recognized in assessing the employer for a 
share in the support of a contributory system. 

It is recognized that those who are now old or near the pen- 
sionable age cannot be supported on any contributory pension 
plan. It would be necessary to give such persons credit for 
contributions in proportion to their age. Such a concession to 
the non-contributory principle might be justified merely as a 
means of introducing the contributory plan. 

It should, however, be recognized that a man's normal wage 
should be sufficient to provide not only for the support of the 
man and his family during his earning period, but for the sup- 
port of his wife as well as himself when he is, on account of old 
age, no longer capable of earning. As a State-aided, contrib- 
utory pension plan is the easiest way under which a worker 
can make proper provision for old age, it ought to be possible 
for him under such a system to make provision for his wife as 
well. To say that his wages are insufficient to make such con- 
tributions is to confess that he does not receive a true living 
wage. The same principle really applies in the case of women 
who are not wives of wage earners, nor wage earners themselves. 
Some one is paying for their support, and it should be recog- 



100 SOCIAL INSURANCE. [Feb. 

nized that adequate support includes proper support for old 
age. ' 

We recognize that there is not at present any general demand 
for a contributory system of old-age pensions; we submit, 
however, that in principle and in probable efficiency in opera- 
tion it has much more to commend it than the non-contributory 
plan. 

ALLISON G. CATHERON. 

FRANK S. FARNSWORTH. 

HARRY C. WOODILL. 



1917.1 HOUSE — No. 1850. 101 



STATEMENT OF EDEN K. BOWSER. 

There has not been in Massachusetts, or in any high-wage 
country, a sufficient experience on which to found any final 
judgment concerning old-age pensions. There is, however, 
enough experience to warrant an opinion that an old-age pension 
of the non-contributory type is adapted to and is a proper 
part of our governmental function, when proper means are 
found to meet the expense. 

Those deserving men and women who, through misfortune or in- 
ability to save, are not able to provide for their old age, should be 
cared for, and it is certainly a function of a well-governed State to 
see to it that its citizens enjoy the fullest measure of happiness 
and self-respect. Old-age pensions are a means to that end. 

Old-age pensions, however, mean a great increase in "State 
expense, perhaps doubling or trebling our State tax. We can- 
not at present say that the State is prepared to meet that new 
expense. An increase in State tax means an increase in city 
and town tax, which taxes are for the most part borne by real 
estate and the contributions of those small real estate holders 
who have fought the same battles and suffered the same 
vicissitudes of fortune, sickness, unemployment and losses as 
those whom they are to support by old-age pension. 

The direct taxes coming to the State through taxation of 
intangibles and incomes are not now certain in amount, and 
there is little value in speculation as to probable increases or 
decreases, or as to whether or not there are new sources open 
to taxation sufficient to take care of old-age pensions. Within 
a year or two we shall have an exact demonstration as to how 
large our new State revenues are, and until that time it is not 
good judgment to greatly alter or amend our taxation laws. 

If it shall be found that there is an increase in State income 
adequate for such a purpose, definite legislation might then be 
considered. And if it shall be found that taxation of intangibles 
will not yield an adequate revenue for the cost of old-age pensions, 
then our citizens should be squarely informed of that fact, so that 
they may not be misled into voting for legislation, however de- 
sirable it may appear to be, on the mistaken assumption that 
some one else is going to pay the bills. 

EDEN K. BOWSER. 



102 SOCIAL INSURANCE. [Feb. 



STATEMENT OF JOHN P. MEADE. 

Changed conditions of civilization have presented the problem of 
old age in a new form. The transition from an agricultural State 
to a Commonwealth where manufacturing industries predominate 
has resulted in a great and growing multitude of wage workers 
dependent upon their daily wage for sustenance and support. 
The pace at which intricate machinery compels the worker to 
respond with physical activity is such that the effective working 
life of the industrial population is shortened. It is a matter of 
common knowledge that, in the power-driven industries of the 
Commonwealth, workmen above sixty years of age are not 
generally employed. The demand for speed eliminates them 
where they are unable to maintain the pace. The merchant or 
business man approaching this age can slacken his activity and 
thus prolong his productive years. But when the physical 
power of the wage earner begins to fail it is very difficult for 
him to keep his employment. There are no reliable statistics to 
indicate the number of aged persons employed in the manu- 
facturing industries of Massachusetts. We do know, however, 
that of all persons injured in the course of their employment in 
this Commonwealth less than 3 per cent, are sixty years of age 
and over. These figures from the Massachusetts Industrial 
Accident Board can only mean . that a comparatively small 
number of the older people are employed in industry. Yet 
medical progress and improved sanitary conditions within 
recent years have undoubtedly prolonged the length of human 
life. In 1880, for example, but 3.5 per cent, of the population 
of the United States were sixty-five years of age and upward; 
in 1910 the percentage was 4.3 per cent., and this during a 
period which was characterized by an extraordinary immigra- 
tion of young persons. While greater longevity is most desir- 
able it seems to have the effect of intensifying the problem of 
old-age dependency. Because of these facts there is now a well- 
established public opinion that the almshouse is not a fitting 
reward after a life of honorable conduct and toil. 

These changed conditions have induced many countries out- 
side of the United States to relieve old-age dependency. 
Nations less powerful and possessing less wealth than the 



1917.] HOUSE — No. 1850. 103 

United States have apparently solved the question of old-age 
relief. Great Britain, Denmark and the British colonies in 
Australia and New Zealand pension the needy, deserving and 
aged poor. Belgium, France, Germany, Italy, Spain and 
Sweden provide old-age insurance under State management. 

In our own country Alaska recently adopted a plan of pro- 
viding for the aged and indigent pioneers of its gold fields. 
The old-age pension law adopted in Arizona in 1915 was, how- 
ever, pronounced unconstitutional by its Supreme Court. The 
support of the very aged poor in this Commonwealth at the 
present time is derived from many sources, — from their 
individual savings, private insurance, contributions of children 
and other relatives, employers' retirement pensions, municipal 
pensions, United States military pensions, public poor relief 
and private charities. 

With the annual income of the average wage earner in Massa- 
chusetts estimated at about $564, it is evident that the margin 
for possible saving on such an income is exceedingly small for a 
large portion of the working population. If saving in this 
respect is affected at all, it is likely to be at the expense of 
child labor, home work, overcrowding in the tenements, or 
other conditions not conducing to the public welfare. 

Whatever the causes and conditions of this problem, it is in- 
disputable that a portion of the population reaches old age 
without means of support. Old age is the last emergency of 
life, for which provision is neglected for every other exigency. 
It is not correct to assume that all such persons have not been 
industrious and thrifty during their lives. The savings of many 
are often swept away by bad investment. Many business 
failures, too, occur, especially among small-sized concerns, and 
the number of persons impoverished through fraud or mis- 
fortune in middle life is very great. In the report of the 
Massachusetts Commission on Old Age Pensions, Annuities and 
Insurance of 1910 there will be found the significant statement 
that out of 14,988 destitute old people interviewed by the 
Massachusetts Old Age Commission, 4,677 had had some prop- 
erty at one time or another. 

It has been said that the possibility of a pension awaiting 
some portions of the population in their declining years would 



104 SOCIAL INSURANCE. [Feb. 

be sure to weaken their character and habits of thrift. Twenty 
years of old-age pensions in Denmark have not visibly weakened 
the thrifty habits of these people. Indeed, the number who 
apply for poor relief between the ages of fifty-five and sixty 
(when eligibility to a pension begins) has markedly declined 
within that period. On the other hand, the absence of any such 
system in this Commonwealth has not resulted in making thrift 
a distinctively Massachusetts trait. That Massachusetts will 
sooner or later be forced to face the question of old-age relief 
can scarcely be doubted by any one who is familiar with the 
condition of affairs in modern industrial communities. 

The general reasons for some method of relieving old-age 
dependency are admitted to be sound. Very few are they who 
do not acknowledge the desirability of old-age pensions. Voters 
are quite willing, as recent events have demonstrated, to sign 
petitions instructing their representatives to support bills in the 
Legislature, with this purpose in view. Many large employers 
of labor in this Commonwealth still retain on the pay rolls of 
their business some of their superannuated workmen who have 
grown old in the service. The principle meets with almost 
universal approval. The pensioning of the aged and deserving 
persons of the Commonwealth who have contributed by their 
talent and labor to its development is a problem that has 
engaged the attention of the General Court for many years. 
Groups of citizens in different parts of the State petition the 
Legislature each year to enact legislation designed to reduce 
old-age pauperism. 

The establishment of an old-age pension system in Massachu- 
setts can only be accomplished by wise and constructive effort. 
Pensions for the aged persons of the Commonwealth should not 
be granted indiscriminately. Only those of good moral char- 
acter, who through a lifetime of patient industry and toil have 
contributed to the moral, social and industrial development of 
Massachusetts, can be said to have a legitimate claim in this 
respect. Pensions are justifiable only on the ground of service 
rendered to the Commonwealth. When the attempt is made to 
secure an income sufficient to provide pensions for the deserv- 
ing and aged persons, without means of support, the vital 
difficulty is reached. The annual amount required would be in 



1917.] HOUSE — No. 1850. 105 

proportion to the conditions of eligibility. Estimates based on 
certain bills presented to the Legislature in recent years vary 
from $5,000,000 to $18,000,000. To add either of these amounts 
to our present State tax would be simply creating a new burden 
while attempting to escape an old one, for in addition to the 
amount now being paid by the State to the recipients of public 
relief, which investigation of the Bureau of Statistics places at 
over $2,250,000, there would then remain the task of raising 
through the State tax the income necessary to maintain the 
pension fund. The small property owner and the wage earner 
paying rent would bear this burden chiefly. The Industrial 
Commission of Wisconsin in its "Report on Old Age Relief," 
issued in March, 1915, expressed the opinion that a fund should 
be raised by the State and county, each contributing one-half 
of the amount necessary for the purpose of providing pensions 
for aged persons of its Commonwealth. As a means of securing 
funds by the State for this purpose it was suggested to levy a 
special poll tax of $1.50 per annum upon all citizens between the 
ages of twenty to sixty years. This suggestion has at least the 
merit of candor. It recognizes the fact that when pensions are 
paid out of general taxation they cannot be said to be entirely 
non-contributory. The term "non-contributory," in its rela- 
tion to old-age pensions, can only be properly used to designate 
that system which does not employ personal contributions for 
the specific purpose of providing the payments. In the final 
analysis the citizens of the Commonwealth must be called upon 
to pay the bills. 

I favor a system of pensions for the aged, needy and deserv- 
ing persons of Massachusetts who are without income or means. 
I hold it to be the duty of the Commonwealth to maintain in 
reasonable comfort those persons who come within this classi- 
fication, and who by years of service have contributed to its 
moral, social and industrial progress. Pensions for such persons 
would simply mean an appreciation of those qualities that make 
for a prosperous Commonwealth. They would be as honorable 
as that of the soldier, who offers his life for the preservation of 
the State. 

Taxation is the only effective means by which to meet the 
expenses incidental to an old-age pension system. To share the 



106 SOCIAL INSURANCE. [Feb. 

cost of maintaining the expenses of government, according to 
the ability of each to pay, is the most practical and just prin- 
ciple. The Tax Commissioner of Massachusetts, in House 
Document No. 2290 of 1913, expresses the opinion that in- 
tangible property to the value of $4,500,000,000 is escaping 
taxation. A reasonable assessment on this property would 
yield a sum sufficient to maintain a pension system for the aged 
and needy. Legislation was enacted by the General Court of 
1916 with a view to increasing the revenues of the State by the 
taxation of intangibles and incomes. It has been said that 
" within a year or two we shall have an exact demonstration 
as to how large our new State revenues are, and until that time 
it is not good judgment to greatly alter or amend our taxation 
laws." While many will doubtless agree with this view, it is 
sound to insist that the Legislature should evolve some laws 
that would insure its rightful revenue from the taxation of 
intangible personalty. As a means of meeting one of its highest 
duties, namely, providing for those aged persons without means 
whose lives have been spent in its service, the Commonwealth 
should establish an old-age pension system and secure from the 
taxation of intangibles the means to support it. 

JOHN P. MEADE. 



1917.] HOUSE — No. 1850. 107 



REPORT ON UNEMPLOYMENT. 



The problem of unemployment has attracted the attention of 
the best minds in the Commonwealth for many years. The 
effect of involuntary idleness upon the general well-being of the 
individual and its depressing influence in the home constitutes a 
problem closely associated with the progress of the Common- 
wealth. 

Governor McCall, in his inaugural address to the Legislature 
of 1916, took occasion to present this matter, urging attention 
to its serious import to the State, and asking that a constructive 
plan be devised to diminish unemployment and the evils arising 
therefrom. In forcible language he described the acute con- 
ditions prevailing in the latter part of the year 1914 and early 
in the year of 1915, and said: — 

The unemployment crisis of the past year revealed our unpvepa redness 
in methods of dealing with this grave problem methodically and effectively. 
We already have the beginnings of a system of State employment offices, 
and it seems clear that the State has a constructive opportunity in this 
direction of which immediate advantage should be taken. Two recent 
special commissions have recommended legislation along these lines as 
being both expedient and necessary. 

One of the most deplorable problems in our civilization is the 
suffering of the industrious citizen because of lack of employ- 
ment. When the income of the wage earner is interrupted the 
welfare of the home is affected. Especially is this true when the 
family is large and the duty of securing the necessities of life 
for a number of small children is imperative. A serious prob- 
lem in a community is the presence of groups of families whose 
provider is unable to obtain the means of support because of 
inability to secure work. 

The effects of unemployment are not restricted, however, to 
the anxiety and hardships of those out of employment. They 



108 SOCIAL INSURANCE. [Feb. 

constitute a serious injury to the entire community, which be- 
comes manifest in the consequences of acute poverty. The need 
for some practical means of diminishing unemployment in 
Massachusetts is apparent at once when it is realized that three- 
fifths of the wage earners of Massachusetts earn an annual 
average wage of less than $575 a year 1 and we are told that out 
of 700,000 workers in the industrial establishments in this 
State over 400,000 receive less than $675 a year. 1 Abnormal 
conditions in the industrial world have brought about increased 
wages in some portions of the Commonwealth since these figures 
were compiled. This does not mean lightening the burden of 
the wage earner to an appreciable extent, because of the extra- 
ordinary increase in the cost of commodities. 

Regular employment is essential to the conservation of health 
and the development of character. It is indispensable to the 
well-being of the home. "Reasonable security of employment 
of the bread earner," said W. K. Beveridge, "is the basis of all 
private duties and all sound action." On account of inability 
to get work, wage earners lose five days for every two lost 
through sickness. 2 From the standpoint of economic loss to 
the worker, unemployment should be considered before acci- 
dents and sickness. 

More effective machinery is needed to bring the man and the 
job together. The marketing of materials has become most 
efficiently organized, but very few adequate means exist to 
bring the buyer and seller of labor together. 

The fluctuations in the numbers employed in the industrial 
establishments of the Commonwealth indicate the extent to 
which employees are taken on and discharged in the course of 
a year. For example, during 1914 there were employed, during 
the month of March, 633,583 wage earners in the industries of 
Massachusetts, while in December of the same year the number 
dropped to 580,489. * Thus we observe that at least 54,000 
wage earners in the manufacturing industries of the State were 
thrown out of employment because of a falling off in production 
during a period of only nine months. 

The terrible loss to the community caused by casual labor 

1 Bureau of Statistics. 

2 Massachusetts Commission on Unemployment, 1915. 



1917.] HOUSE — No. 1850. 109 

is appalling, the cost not only in dollars and cents, because 
of the poverty arising therefrom, but the cost in the health 
and the lives of these workers. It is in their families that the 
children either die in the first few months of life or grow to a 
warped and stunted maturity, to produce in turn another 
generation of inferior men and women. As proof of the effect 
of casual labor on the health and prosperity of a community, 
it has been stated that four-fifths of the problems of the med- 
ical officer of health arise where the casual labor class con- 
stitutes possibly one-tenth of the population, and that it is this 
same class which constitutes two-thirds of all our pauperism 
other than that of old age, sickness, widowhood and orphanage. 
We therefore advocate the regularization of industry by 
Federal and State control, to the end that the total national 
demand each year may be equalized. The help of private 
industries is imperative to this end, in avoiding seasonal and 
other fluctuations. These results can be brought about in 
private industries — 

1. By the reduction of the turnover of labor, under an em- 
ployment manager (the turnover of labor is at present so great 
that often to keep up a force of 300 men, 1,000 are engaged and 
discharged). 

2. By a scientific transfer of workers between departments. 

3. By planning production, whenever possible, six months in 
advance. 

4. By building up slack season trade. 

5. By going after steady rather than sporadic or speculative 
business. 

6. By careful study of market conditions, and adjustment of 
the business to take advantage of them. 

7. By the establishment, when possible, of foreign trade to 
supplement domestic trade, since a diversity of customers tends 
to regularize the demand. Employers should co-operate with 
each other, and with all others making legitimate efforts, toward 
the lessening of unemployment; the}' are, indeed, already begin- 
ning to do so. 

The above suggestions are in general accord with the ideas 
of Mr. John B. Andrews, Secretary of the American Asso- 
ciation for Labor Legislation, as set forth in Appendix C of 



110 SOCIAL INSURANCE. [Feb. 

the report of the Ontario Commission on Unemployment, 
1916. 

Steady jobs that afford a competent living to citizens are of 
vital importance to the Commonwealth. Dr. Royal Meeker, 
United States Commissioner of Labor Statistics, lays bare the 
common attitude toward unemployment, and defines its true 
significance in the following statement : — 

Unemployment is the greatest evil of our competitive industrial system. 
We have been exceedingly slow to admit the actuality of involuntary un- 
employment. Even yet we more than half believe that he who seeks may 
find work at all times, and that unemployment is due to the refusal of 
workers to work. Only in periods of industrial crisis and depression do we 
awaken to some faint realization of the fact of unemployment and the tre- 
mendous money losses and the irreparable injuries to the character of 
workless workers resulting therefrom. With enormous toil and turmoil 
and clatter of preparation we organize soup houses, bread lines and phil- 
anthropic " industries," which produce for the most part piffling wares of 
little or no utility at substandard wages. With the onset of good times we 
drop our fevered activities in formulating complete programs to take care 
of unemployment, relapse into our normal state of profound indifference, 
and speedily forget the unemployed and their unemployment. We have 
never as yet acknowledged or realized that the unemployed (another name 
for the poor) we have always with us. In the best of times there is in the 
United States an appalling amount of unemployment even in our most 
stable industries. The exceedingly fragmentary statistics at our command 
indicate that the losses due to unemployment are immensely greater, both 
in money and in morals, than the losses due to industrial accidents or in- 
dustrial illness. All these industrial hazards must be frankly recognized 
and frankly faced.. The ostrich, we are told, thinks to efface his enemies 
from the landscape by burying his head in the sand. He is a firm believer 
in the blissfulness of ignorance and the folly of wisdom. We have much 
in common with the ostrich. We hold tenaciously to the philosophy that 
social, economic and political evils exist only when we open our eyes to 
them; that industrial accidents, illness and unemployment are not burdens 
until we provide some sane method of carrying or eliminating them. 
Until very recently our favorite method of dealing with industrial hazards, 
including involuntary unemployment, was to close our eyes tightly and 
bury our communal head in the sand. 

Expert opinion in this Commonwealth is in accord with the 
foregoing statement. The necessity for permanent interest in 
the matter of unemployment is forcibly set forth in the report 
of the Massachusetts Committee to promote work during the 



1917.] HOUSE — No. 1850. Ill 

year 1915. This group of able citizens reached the opinion 
that — 

The permanent and fundamental aspects of the problems of unemploy- 
ment should, however, be kept before. the public mind persistently, until 
some practical propositions for the betterment of this great evil are brought 
forward. It is to be hoped many committees, both voluntary and official, 
will be formed to think out this complex problem, and that the interest in 
it will not be allowed to flag when the immediate need has passed. What- 
ever the proper preventive measures may be, it is certain that they must 
be provided for during good times. After the bitter experiences of the past 
winter, our State will have much to blame itself for if the next depression 
finds us equally ill-prepared to meet it. 

Other Massachusetts commissions have devoted much time 
to the consideration of this problem. The Commission on 
Immigration of 1914, in considering the relation of immigra- 
tion to unemployment, gave expression to the following view: — 

The first step toward the reduction of the evils of the present system of 
distribution is a State employment agency, which shall make a compre- 
hensive study of the labor market, shall give special attention to casual 
labor problems, shall do the practical work of placing the individual man 
in each individual job, and shall develop a follow-up system so that sub- 
sequent work shall be increasingly efficient. 

An extension of our existing public employment offices to 
other parts of the Commonwealth, and the adoption of a plan 
to secure the support and co-operation of workmen and em- 
ployers, would be the most practical means with which to 
approach the problem of unemployment. It would be the first 
step in organizing the labor market on a scientific basis. Just 
as the produce exchange brings about co-operation between 
those who buy and those who sell, so should the public employ- 
ment office be a means of placing the unemployed worker in 
touch with occupational activity. It would seem to be the 
most practical means at hand for this purpose. As a barometer 
of industrial conditions in the Commonwealth it would be of 
great value, and it would also be of benefit as a practical insti- 
tution for the accumulation of important statistical data. 

One of the most striking facts of modern industrial life is the 
enormous waste of time and money by working people in search 
of employment. A man seeking work to-day must try many 



112 SOCIAL INSURANCE. [Feb. 

methods. The most common is to apply at the actual place 
where labor may be found. He may tramp or ride to different 
parts of the city, or he may even answer advertisements in the 
daily newspapers, and in following them up may find himself in 
line at the entrance of some of our industrial establishments in 
company with a large group of applicants for the same job. If 
he has some money at his disposal he may try a private employ- 
ment agency, where he will find established the custom of 
paying from 5 to 20 per cent, of his first month's earnings for 
the job. 

The cost to the employers of this Commonwealth in main- 
taining employment departments in connection with their busi- 
ness, and in advertising in the newspapers in Massachusetts for 
workmen, is an expensive item, and one which musij in the 
final analysis be made a charge upon the industry. It is no 
exaggeration to say that the aggregate cost of this feature of the 
industrial life of the State represents millions of dollars. Such 
conditions are unscientific, uneconomic and constitute a burden 
to the employer, the workmen and the consuming public. 

There is no reliable data at hand to prove what it costs the 
wage earners of this Commonwealth to secure employment 
through private employment agencies. We have learned, how- 
ever, from investigation that in the State of California it is 
known that more than $400,000 was paid by the working people 
to private employment agencies in a single year. 1 These facts 
warrant us in stating that the system of placing workers 
through the private employment offices in the industrial estab- 
ments of Massachusetts is costly to the people of our Common- 
wealth. 

Much of our unemployment can be eliminated by a modern 
organization of the labor market. The loss of time between 
jobs for workers represents millions of dollars in the aggregate, 
and this waste a unified system of State employment offices 
could reduce to a very low minimum by connecting work and 
the worker with the least possible delay. 

The use of the labor exchange in the industrial Nations of 
Europe has passed the experimental stage. It is now looked 
upon as an integral part of every system of social insurance. 

1 California Commission on Immigration and Housing Conditions. 



1917.] HOUSE — No. 1850. 113 

It occupies a prominent place in the industrial system of Ger- 
many. In England no worker is more than 5 miles away from 
a labor exchange, and in the countries of northern Europe labor 
exchanges are now looked upon as essential factors of industrial 
development. 

It is plain that the cost of relieving unemployment is not a 
net expense. We are especially impressed with that part of the 
report of the Ontario Commission on Unemployment which 
reads as follows : — 

Special stress is laid on the prevention of disease. So, too, the preven- 
tion of unemployment, when feasible, is far better than the best provision 
of relief. In any country society is faced by the alternative of leaving 
those in distress to shift for themselves as best they may, or of relieving 
them on some considered plan. The cost of inaction must be balanced 
against the cost of adequate relief. Inaction involves the physical and 
often the moral deterioration of many workers. It encourages indiscrimi- 
nate begging, and is responsible for the growth of a parasitic class. It 
compels mothers with young children to neglect their domestic duties in 
order to secure a livelihood. It may compel large numbers of young chil- 
dren to go to work at an age when, for their own sake and for the general 
good, they should remain in school. 

It is difficult to believe that any form of organized relief, which does 
not directly pauperize, can be more costly to society than the refusal to 
take action. Payment for such refusal is always exacted in the form of 
increased provision for the sub-normal and for criminals, and constitutes 
a very heavy burden. 

As an instrument to relieve much of the unemployment in 
this county the public employment office has demonstrated its 
value. An investigation conducted by this Commission of its 
operation in the United States has convinced us of its efficiency 
and adequacy in diminishing unemployment. 

Reports from the chief industrial States in the country indi- 
cate an awakened interest in this matter and in a more efficient 
and intelligent use of the public employment office as a factor 
in treating with unemployment. 

The Commissioner of Labor of Missouri, in replying to the 
questions addressed to him by the Commission relative to the 
question of unemployment, said : — 

There is no doubt in my mind but that employment bureaus are needed 
in the chief industrial centers throughout the country. In fact, all the 



114 SOCIAL INSURANCE. [Feb. 

large cities should have a labor exchange, which should be a part of a gen- 
eral system wherein the employer and employee could meet and be referred 
to each other as they may desire or as conditions may require. 

These offices are really just beginning to be substantially established. 
It is a great work to be done. The evils of unemployment can at least be 
minimized; certainly the causes and conditions of unemployment can be 
truthfully ascertained, and the offices would at least be able to suggest a 
remedy for overcoming the handicaps, trials and troubles incident to sea- 
sonal occupations or employment. A general record system, providing 
full, complete information as to conditions of industrial employment, em- 
ployers and employees, and as to each industrial center where the offices 
are located, to be used in a systematic way by some means of communica- 
tion from one center to the other throughout the country, would be the 
most valuable asset to an industry that could be provided, because then 
you would be able to work out all plans to provide remedies for social and 
economic ills. 



Another large industrial State — the State of New York — 
established under its new industrial commission a bureau of 
employment, with a director who is charged with the duty of 
supervising State employment offices. The first office was es- 
tablished in Brooklyn early in 1915. Shortly afterwards offices 
were established in Buffalo, Rochester, Syracuse and Albany. 
The administrative office is located in New York City, and the 
branch offices throughout the State send in daily reports of 
their work to the main office. Through this method all the 
offices are kept in constant touch with one another, and all the 
employees are under civil service. 

In New York the law calls for separate departments for men 
and women and a separate department for juveniles. Each 
office has an advisory committee composed of an equal number 
of representatives of organized labor and representatives of em- 
ployers' associations, with a provision for equality of voting 
power. 

The State director, in describing the functions exercised by 
the New York Public Employment Bureau, informs the Com- 
mission as follows : — 

It is a settled question that it is the duty of the State to give the child 
an academic education, and we are already reaching out toward the phase 
of giving him an industrial education. It is surely just as much the duty 
of the State, after giving the child the education it does, to further direct 



1917.] HOUSE — No. 1850. 115 

him in the choosing of his life work. This can only be done practically 
and effectively through a wide system of public employment offices. 

Every day that a workman loses, through the lack of knowledge as to a 
proper opening for his services, is a loss to himself and society. All com- 
munities should have a central bureau of information where the worker can 
learn what kind of openings there are in that community for him, and 
where the employer may turn for an opportunity to make a broad selection 
of the kind of workers necessary for his particular work. Through the 
placing of adult workers in positions for which they are fitted the public 
employment offices become acquainted with industry and its demands and 
opportunities. This information can be used by public employment offices 
in covering the first phase of their work mentioned above, namely, that of 
practical and proper juvenile direction and placement. 

The establishing of our public school system has practically eliminated 
the private school, except in special lines. Private employment bureaus 
(which charge a fee) may probably be necessary for many years, but for 
all general lines of work, from the highest to the lowest, it is the duty of 
the State to furnish workers with information regarding industries and 
opportunities, and incidentally to save a large class of workers from the 
vicious exploitation carried on by some private employment agencies. 

And further, in regard to public employment bureaus, he 
said : — 

These offices are handling all sorts of workers, from the professional man 
to the man who uses a pick and shovel. Some of the offices have estab- 
lished separate departments for the disposal of teachers and farm hands. 

In the women's department domestics naturally have led in number. 
Excluding the domestics from the calculation, more than 60 per cent, of 
the places filled in all the offices up to this time belong in the class known 
as skilled or professional. Public employment offices have been too gen- 
erally regarded as places fitted only to handle common labor or the near- 
unemployable. The policy in this State for these offices is not to attempt 
to handle people who have to be " reclaimed." That work for the present 
has to be left to charitable organizations. The attempt is being made to 
make the offices bureaus of information for the capable workers on the 
one hand, and the employers on the other. Endeavor is being made to 
eliminate the use of the word "free" in connection with these offices. It 
is true their services are free, and so also are the services of the public 
school. We have, however, long since outgrown the use of the term "free" 
in connection with public schools. We should not retain it in referring to 
the public employment offices, giving them the taint of charity, and thus 
driving away capable workers who resent the implication of being patron- 
ized. No parent, however well-to-do, thinks of charity when he sends his 
child to the public school. Too often he will not patronize a "free " public 
employment bureau, except as a last resort. One of the greatest benefits 



116 SOCIAL INSURANCE. [Feb. 

of these new offices is that they are training a set of men and women who 
eventually will be capable of dealing adequately with the question of 
properly fitting workers into industry. The employees of these offices are 
now coming in contact with the needs of industry on the one hand, and the 
needs of applicants for work on the other. It is not every man, even 
though he may be well trained in other lines, who can understand the needs 
of the employer for the different kinds of workers, or who can take an 
order for help in hand and select from the individuals in front of him, or 
from his registration lists, one who is best fitted to fill all the demands of 
the position offered. The haphazard method of hiring men, which so often 
obtains, has been the means of creating many unemployables. Men under 
the stress of an immediate need, either of themselves or the employer, 
have been placed in positions for which they were so poorly fitted that the 
work was not only disagreeable to them, but they could not adequately 
meet the demands of the position. The consequences of this were discon- 
tent on the part of the worker and resentment on the part of the employer. 
This same man adequately fitted to a position might not only have been 
happy in his work, but far more productive, meaning higher wages on the 
one hand, and on the other, greater output, with less expenditure of 
strength. 

When the general public, and especially employers, become better ac- 
quainted with the true function of public employment offices, when they 
give them their confidence and patronage, it is to be expected that the 
offices will become what they should be, actual bureaus of industrial in- 
formation. 

In States where seasonal occupations predominate the bene- 
fits of the public employment office to employer and workman 
alike are acknowledged. In the State of South Dakota public 
employment offices managed under the Department of Immi- 
gration are said to be doing excellent work in this respect. Ex- 
plaining its work in a letter to our Commission, the commis- 
sioner says : — 

The public employment office managed by this department gets the man 
for the employer when he is needed, and, to a less extent, we find work for 
the unemployed. Our work comes largely in providing harvest labor for 
the grain farmer, as we need about 8,000 to 10,000 transient laborers in a 
good grain year. It is conducted especially to meet the need of this sea- 
sonal labor. I do think that a system of labor exchanges can prove mu- 
tually helpful, each supplementing the other. Our labor matters are 
pretty well adjusted, and not difficult in any season except for the harvest. 
We have united in what is known as the National Farm Labor Exchange 
covering all the grain-growing territory of the mid-western States from 
Texas to North Dakota, and think that we see some desirable results, 
from this. 



1917.] HOUSE — No. 1850. 117 

The Department of Labor of the State of Michigan sends to 
the Commission the following in reply to questions seeking in- 
formation with regard to the utility of the public employment 
office in that State : — 

In places where there are no employment offices at the present time the 
man looking for a position is compelled to tramp from one concern to 
another and wait for several hours in line to see the superintendent, and 
then perhaps is told that they are not in need of help, and must then con- 
tinue his journey until he has made all the factories. In the cities where 
we have public employment offices the employers of labor telephone in 
their wants, the persons looking for work apply at the employment office, 
and are advised whether or not there is any demand for help in their line, 
and if so, where such demand is. Their ticket from the employment office 
insures them an audience with the employer at once. It is simply a more 
convenient and modern method than the old style. 

In Michigan we have ten employment offices operated by the State, 
five having been opened during the past year. It is my intention to ask 
the Legislature for an appropriation in order to open several more offices 
next year. 

In 1915 there were 54,000 persons sent from our five employment offices 
in operation at that time, and another office opened at Flint in June, 1915, 
making six in all. 

The managers of the several bureaus in Michigan report to each other 
every day concerning the number of people sent out and the number of 
people requested by employers, together with other information they may 
have. In some cities we may have an oversupply of labor and in others a 
shortage, and in that way we are able to inform the employers where there 
is an over-supply of labor, and upon receipt of an order from a distant town 
or city men are sent from the nearest point. 

I do not claim that in case of a calamity, or a universal shutdown of 
plants throughout the State, an employment office could be of any material 
assistance in localities where there would be " nothing doing," except that 
they might be used as bureaus of information by people seeking employ- 
ment, by keeping in touch with other parts of the country where there 
might be a demand for help. 

It is interesting to note that the State of Illinois has a general 
advisory board, in connection with its various free employment 
offices, which is concerned with all problems connected with 
unemployment, as well as a local advisory board for each of its 
free employment offices located at its various industrial centers. 
The following is an excerpt from a letter to the Commission by 
the general superintendent of the Illinois Free Employment 
Office: — 



118 SOCIAL INSURANCE. [Feb. 

In regard to the advantages to the employer and the workman of the 
public employment offices in this State we beg to advise that, in times of 
labor scarcity such as we are now experiencing, the advantages to the em- 
ployer are only too manifest. For instance, we receive calls from employers 
daily for assistance in finding for them help to fill their requirements which 
they have been unable to fill from any other source. This is probably due 
to the excellent publicity secured and reputation enjoyed by this office. 

We have demonstrated to their satisfaction the fact that an efficient 
free labor exchange receives the patronage of all classes seeking employ- 
ment, and consequently is the source to which all employers appeal in 
experiencing difficulty in securing the help which they need. In a like 
manner confidence is installed in the workman who finds himself out of a 
position, and where a reputable free public employment office exists he 
soon learns that every available opportunity is generally listed with such 
an office. Consequently, the advantages of an office of this kind are so 
apparent that we know of no argument which could be used to advocate 
its abolishment, and are thoroughly satisfied that an efficient system of 
free labor exchanges established throughout the chief industrial centers 
of this State has proven a very effective method of alleviating the suffering 
of the unemployed. For instance, in the Chicago offices alone we are now 
filling at the rate of about 8,000 positions monthly. Even should they 
all prove but temporary, the vast effect upon the public cannot be too 
greatly appreciated. 

The Commission of Labor of the State of Kansas sends to 
the Commission the following in reply to questions seeking in- 
formation with regard to the utility of the public employment 
office in that State : — 

The advantage to the employer and employee will be untold when a 
system of interchange between States operating public employment offices 
is maintained, preferably through the Federal government. 

Our State employment office saves both the employer and employee 
thousands of dollars in getting the two in touch with each other. 

The establishing of public employment offices throughout the State is 
the only method of relieving the evils consequent to unemployment. 

The foregoing statements are typical of reports received from 
many other States of the Union. They indicate a growing in- 
terest in the work of diminishing unemployment. The general 
attitude toward the problem is now one of active concern. To 
connect the industrious citizen who is out of work with em- 
ployment is held to be of advantage to the individual, the 
home and the community. To carry on this work is now con- 



1917.] HOUSE — No. 1850. 119 

sidered by the great manufacturing States of this country as a 
legitimate function of governmental activity. 

The study and investigation of the subject of unemployment 
in this country has made clear to our Commission the need of 
more constructive methods of dealing with this problem in 
Massachusetts. The statement to this Commission of Charles 
F. Gettemy, Director of the Bureau of Statistics, is published on 
page 295 of Appendix C; also a very interesting analysis of un- 
employment in the organized industries of Massachusetts from 
1908 to 1916 from the same source (Appendix C, page 277). 
We believe the time has come when something must be done 
to increase the efficiency and opportunities for usefulness of the 
State employment offices to the public. If the management of 
these offices is to be under the administration of the director 
of the Bureau of Statistics, he should not be hampered in his 
choice of important employees in said offices by selection 
through civil service, if by so doing he should find it difficult 
to secure those who, by temperament and personality, are 
especially qualified to deal with persons seeking employment. 
The Commission realizes that tactful guidance in the placing 
of these people often spells the difference between success or 
failure in their lives. 

We believe that the statutes should provide for an advisory 
council in each city where a State employment office is estab- 
lished, with equal representation by employers and employees. 
The functions of this advisory council should include all matters 
of local administration that would tend to make the State office 
efficient in administering to the technical needs of employers 
and workmen in given industries. We concur in the recommen- 
dation that the State employment offices be gradually increased 
to a number sufficient to include all the important industrial 
centers of the Commonwealth. We believe that their efficiency 
can be improved so that their capacity for usefulness both to 
capital and labor may be made productive of great value to the 
Commonwealth. The utmost publicity should characterize 
their administration. In instances of labor difficulties it would 
be but just, and in accordance with the spirit of Massachusetts 
laws, to have published statements relating to the controversy 
placed at the disposal of applicants for employment. Public 



120 SOCIAL INSURANCE. [Feb. 

service corporations which derive their franchises from the 
people, such as telephone or railroad corporations, should be 
considered in the integral thought of the prevention of unem- 
ployment, and made to give of their services at reduced cost in 
an effort toward bringing the person out of employment into 
speedy and inexpensive communication with those in need of 
labor. 

On page 299 of the Appendix, the Commission reprints an 
abstract from the remarks and recommendations made to the 
Commission by H. J. Skeffington, United States Commissioner 
of Immigration. The statement and suggestions contained 
therein, relative to new fields of activity by the government in 
this direction, are worthy of careful consideration in connection 
with our report, and it would seem that the State could, per- 
haps, co-operate with the national government in this work 
to the good advantage of both. 

While the Commission is convinced of the practical and 
immediate necessity for the establishment of State employment 
offices in accordance with the general methods here outlined, it 
is also of the belief that the State should direct its efforts 
further along the lines of a general constructive policy with 
regard to this fundamental problem. According to the assump- 
tion of the leading authorities on the subject, the more serious 
periods of business depression come, roughly speaking, at inter- 
vals of ten years. We believe that it is possible so to plan 
industrial and governmental expenditures as to compensate for 
decreased private employment during such periods by the 
scientific creation of an unemployment reserve fund. 

For the purpose of creating such a reserve fund for the pay- 
ment of wages during periods of business depression, it would be 
entirely practicable to delay one-tenth of the permanent gov- 
ernmental improvement expenditures. This need not entail a 
uniform delay in all such expenditures, but would include all 
of some, none of others, and a varying percentage of the rest. 
The same plan is equally applicable to railroads and other 
great corporations, and should include the purchase of equip- 
ment. 

One of the great contributing factors to the violent fluctua- 
tions in employment is the habit of following the trend of the 



1917.] HOUSE — No. 1850. 121 

general market, which makes more pronounced both periods of 
depression and prosperity. Proper regularization would not 
only tend to lessen the violence of the fluctuations in employ- 
ment, but would tend also toward the elimination of the periods 
of great industrial depressions. It would mean forestalling by 
scientific methods those conditions of unemployment which at 
present force the honest and deserving worker to become the 
recipient of charity. 

According to Mr. John R. Shillady, secretary of the mayor's 
committee on unemployment of New York, the total amount of 
public expenditures on improvements, Federal, State, county 
and municipal, — apart from current administrative and oper- 
ating expenses in 1913, amounted to about $586,500,000. 
(Department of Commerce, Bureau of Census, Report on 
Wealth, Debt and Taxation, 1913.) While this sum represents 
expenditures for an enormous variety of undertakings, it 
represents but 10.6 per cent, of the total cost payments made 
by public authorities during that year, which amount totaled 
$5,527,000,000. It is true that this reserve fund would reach 
directly only certain industrial groups, but since it would go 
far toward preventing a general business depression resulting in 
unemployment, it would indirectly benefit all workers. This is 
closely analogous to the plan now in operation whereby the 
Federal reserve banks release, during periods of financial de- 
pression, portions of reserve funds in their custody, making 
investment capital available at a time when, because of lack 
of confidence on the part of the investing public, there is a 
restriction of circulation. 

Mr. and Mrs. Sydney Webb, writing on the prevention of 
destitution, say, "The very depression itself creates in every 
direction more depression. Prevent it in one industry and you, 
to a corresponding extent, prevent it in others. Regularization 
of the aggregate would tend greatly to regularization of every 
part of the aggregate." They further suggest the printing of 
the reports of the British Historical Manuscripts Commission 
and the official history of the South African War as instances 
of public work which might be reserved for years of trade 
depression. 

Mr. Shillady, whose estimates on unemployment have already 



122 SOCIAL INSURANCE. [Feb. 

been quoted, in a comprehensive paper on this question, read 
before a Conference of Charities and Correction at Indianapolis 
in 1916, cites the possibilities of the working of the plan by our 
government in the reclamation service, public buildings, rivers 
and harbors, and good roads developments, and further suggests 
that the expenditures for "repairs and up-keep" might well be 
subject to regular ization. 

Mr. Frank M. Williams, State engineer and surveyor of New 
York, stated it to be his opinion, relative to regularization of 
expenditures for the construction of the Erie Canal in that 
State, that — 

If yearly appropriations were made for the construction of the Erie 
Canal, which would be similar to the manner in which the (national) gov- 
ernment carries on certain construction work, it might be feasible to vary 
the amount appropriated each year in acordance with the condition of 
the labor market; that is, when labor is plentiful, a larger appropriation 
would be made than in the years when labor is scarce. 

This quotation is as cited in Mr. Shillady's paper. 

Mr. Roswell F. Phelps, who for twelve years has been con- 
nected with the Massachusetts Bureau of Statistics, — a branch 
of the work of which Bureau has been the collection and pub- 
lication of statistics of unemployment, — believes that the plan 
of accumulating a reserve fund during years of prosperity, to 
be used during periods of depression in making permanent 
improvements, would undoubtedly prove an efficient and 
scientific method of providing employment in times of special 
distress. A statement by Mr. Phelps touching upon this 
subject is published in Appendix C to this report, page 297. 

Public construction here in Massachusetts might well come 
under some such form of regularization, which, combined with 
the co-operation of large industries, would go far towards pre- 
venting a repetition of the deplorable conditions of the winter 
of 1914-15 in this Commonwealth. The dilatory habit of 
waiting for a condition, and then, in the midst of the resultant 
distress, trying hastily and usually ineffectively to remedy it, 
is to be condemned as unscientific and wastefully extravagant. 

There is no similarity between a program of scientific regu- 
larization of industry and the often somewhat hysterical, though 
well-intentioned, employing of the unemployed on public works. 



1917.] HOUSE — No. 1850. 123 

The only change in the present procedure would be the plan- 
ning ahead for a period of ten years for industrial and govern- 
mental works, which would produce a steadying effect on gen- 
eral employment by carrying on improvement plans in such 
years as the labor market shows a slackening tendency through 
a falling off in private industry. This program aims to prevent 
unemployment, not to relieve it, and has no relation whatsoever 
to public charity. 

This is the time, when unemployment is at a minimum be- 
cause of abnormally favorable industrial conditions, that we 
should deal with the great problem of unemployment by the 
inauguration of an unemployment reserve fund. 

That some such plan may be carried out in Massachusetts in 
conjunction with our present employment bureaus and our 
industries, and with the co-operation of the Federal govern- 
ment, we recommend that the Governor be requested to ap- 
point as soon as practicable a committee, consisting of the 
heads of appropriate departments of the State government, to 
consider the most feasible method by which such regularization 
may be effected, to the end that State expenditures, upon more 
or less permanent improvements and purchases of supplies, may 
be so regulated as to provide a maximum of employment in 
years of great business depression. We recommend that the 
Governor appoint an advisory committee of twelve, properly 
representative of the industrial and other interests concerned, 
to consult with the committee. We recommend that said com- 
mittee report to the Governor upon this subject six months 
from the date of appointment, and that such report be made 
public. 

It is clear to the Commission that at the root of the unem- 
ployment problem lies the curse of poverty. It is clear, also, 
that not only does unemployment create poverty but poverty 
in turn creates unemployment. Poverty restricts the purchas- 
ing power of the worker, which reduces the demand for labor 
and increases the number of the unemployed. 

It is necessary, in order best to meet conditions of unemploy- 
ment so as to secure greater harmony between employer and 
employee, to insure freedom of the worker through a political 
and industrial democracy. The wage earner is entitled to a 
living wage and a fair share of the profits made from his toil. 



124 SOCIAL INSURANCE. [Feb. 

The very vital problem of dealing with the physically handi- 
capped should not be ignored. They should receive hospital 'or 
corrective treatment, which in the majority of cases would 
result in making efficient workers of these people, thereby 
changing a State liability to a State asset. Whatever may be 
done, however, for the physically handicapped and for prevent- 
ing unemployment, there will never come a time when all un- 
employment will cease to exist. Every year industries fail and 
thrust thousands into temporary idleness; improved machinery 
displaces many more; and, even in the best of times, weather 
conditions, together with many other unavoidable causes, swell 
the number to considerable proportions. 

It will be observed in our report on unemployment that there 
are many perplexing problems which would seem to require 
permanent supervision and attention. Constructive work in the 
solving of these problems can only be accomplished from small 
beginnings and the experience derived from continuous contact 
with them. The matter of regularizing industry, providing for 
temporary relief during periods of depression, reducing the loss 
of time by the worker engaged in casual labor, and the need of 
governmental supervision and regulation of the State and pri- 
vate employment agencies, makes necessary in our opinion the 
establishment of a State board of employment. This board 
should serve without pay and should consist of two employers 
of labor, two representatives of employees, and a woman known 
to be interested in economic and industrial matters. It should 
have a paid secretary, and should be provided with such sums 
for expenses as the Legislature may deem proper for the keeping 
of office records and the compiling of information necessary to 
its development. 

A bill incorporating such recommendations as the Commis- 
sion makes in the foregoing paragraphs will be found in Ap- 
pendix C, page 274. 

In closing we quote from Carlyle, the great Scotch historian, 
who, in a few eloquent sentences, touches the very heart of the 
subject: — 

With the working people, again it is not so well. Unlucky! For there 
are from twenty to twenty-five millions of them. Whom, however, we 
lump together into a kind of dim-compendious unity, ... as "the 
masses." Masses indeed; and yet, singular to say, the masses consist of 



1917.] HOUSE — No. 1850. 125 

units, . . . every unit of whom has his own heart and sorrows; stands 
covered there with his own skin, and if you prick him he will bleed. Every 
unit of these masses is a miraculous man, even as thou thyself art; strug- 
gling with vision or with blindness for his infinite kingdom (this life which 
he has got once only in the middle of eternities) ; with a spark of the di- 
vinity, what thou callest an immortal soul, in him. 

Clearly a difficult point for government, that of dealing with these 
masses; if indeed it be not rather the sole point and problem of government, 
and all other points mere accidental crochets, superficialities and beatings 
of the wind. For let charter chests, use and wont, law common and special, 
say what they will, the masses count to so many millions of units made to 
all appearance, by the Creator, whose earth this is declared to be. 

FRANK S. FARNSWORTH. 
ALLISON G. CATHERON. 
EDEN K. BOWSER. 
HARRY C. WOODILL. 
EDWARD G. MORRIS. 
WENDELL P. THORE. 
JOHN P. MEADE. 
EDNA LAWRENCE SPENCER. 



While we concur with the foregoing report that the first step 
in solving the problem of unemployment should be the creation 
of a network of State employment bureaus, we go further and 
advocate that this should be followed by some system of un- 
employment insurance when sufficient data and statistics are 
available, through our labor bureaus, to make such a law prop- 
erly efficient in solving the problem of caring for the honest 
worker during periods of unemployment without his recourse to 
charity. 

Government statistics published of the working of the unem- 
ployment insurance act of England show that during the pros- 
perous years since the enactment of the law this insurance has 
in its fund a surplus of over $5,000,000 which can be used as 
never before in a crisis of unemployment. 

EDNA LAWRENCE SPENCER. 
WENDELL PHILLIPS THORE. 



126 SOCIAL INSURANCE. [Feb. 



REPORT RELATIVE TO THE HOURS OF LABOR 
IN CONTINUOUS INDUSTRIES. 



Chapter 164 of the Special Acts and Resolves of the year 
1916 directed the Commission, -in addition to considering the 
subjects of sickness, old age and unemployment in the Com- 
monwealth, to investigate the subject of reasonable restrictions 
in the hours of labor in industries operated continuously 
twenty-four hours. Pursuant to the directions contained in this 
resolve, the Commission has given, in Boston, Pittsfield, 
Holyoke and Fitchburg, public -hearings, which were confined 
exclusively to the consideration of this subject. In addition, 
the subject has come in for consideration and discussion at 
other hearings, especially at those held in Lowell, Worcester 
and Fall River. 

A majority of the members of the Commission are unani- 
mous in their recommendations for legislation limiting the 
hours of labor of tour-workers in paper mills. Some of the 
members of the Commission go further, however, and recom- 
mend an act extending the three-tour eight-hour provision to 
all so-called "continuous industries" in the Commonwealth. 
These members believe it would be discriminating unfairly for 
the Commission to select the paper industry alone as the ob- 
ject of special legislation, without at the same time making 
provision for any other industry where similar conditions might 
exist. 

Other members recommend a bill which applies only to the 
tour- workers in paper mills, and its provisions are very similar 
to bills of this character filed in recent years with the Legis- 
lature by the State Branch of the American Federation of Labor 
and the Progressive party. The bill in substance provides that 
no person employed as a tour-worker in any paper mill which 
is in continuous operation day and night shall be required, 



1917.] HOUSE — No. 1850. 127 

except in cases of emergency, to work more than eight hours 
in any one day. A substantial fine is provided in case of failure 
to comply with the provisions of the act, and the duty of enforc- 
ing the act is left to the State Board of Labor and Industries. 

Other members, comprising a minority of the Commission, 
recommend legislation limiting the hours of men employed in 
industries running night and day to eleven. Those members 
who submit the eleven-hour bill believe for all practical purposes 
it will accomplish the desired end and at the same time, without 
going to what they consider the extreme point, of specifically 
recommending the establishment of the eight-hour three-shift 
system in continuous industries not already working under that 
plan. 

Certain others, also constituting a minority of the Commis- 
sion, maintain that the investigation of the Commission has 
shown no such appeal or need as to warrant at this time legis- 
lative interference in the case of any continuous industry. 
These members deem it the part of wisdom to leave the settle- 
ment of the hours of labor in the industries to the employers 
and men themselves. It is their belief that the three-tour 
eight-hour plan is being adopted by the manufacturers as 
rapidly as industrial and labor conditions will permit. 

The several reports follow. 



128 SOCIAL INSURANCE. [Feb. 



STATEMENT OF EDWARD G. MORRIS, WENDELL P. THORE 
AND EDNA L. SPENCER. 

While we absolutely agree with the principle set forth for the 
protection of workers in the regulating of the hours of labor in 
certain industries in House Bill No. 429 and House Bill No. 
932, which were before the Legislatures of 1915 and 1916, 
respectively, each dealing with tour-workers in paper mills, we 
believe the intent of that part of the resolve which created this 
Commission, and which deals with "the restrictions of the 
hours of labor in industries operated continuously for twenty- 
four hours," compels us to consider not only the hours of labor 
in the paper mill industry, but also every other industry where 
the hours are equally as long and equally as oppressive. 

This part of the resolve reads : — 

Resolved, That the special recess commission on social insurance estab- 
lished by chapter one hundred and fifty-seven of the resolves of the year 
nineteen hundred and sixteen, in addition to the matters already referred 
to said commission, shall study and investigate the subject of reasonable 
restrictions in the hours of labor in industries operated continuously for 
twenty-four hours, and shall include in its report to the next general court 
such recommendations with drafts of proposed legislation, as it may deem 
practical and expedient. All the provisions of said chapter shall, so far as 
pertinent, apply' to the investigation herein authorized. 

With the context of this resolve in view, and having in mind 
the justice which the problem demands in dealing fairly with all 
workers who are, or may be, compelled to come within such 
unhealthful and demoralizingly long hours of labor, we are con- 
strained, in order to be consistent, to advocate the enactment 
of a law which will create an eight-hour day in all industries 
operating day and night, continuously or intermittently, within 
the Commonwealth, except in case- of emergency, as described 
in section 2 of the act which we propose and which is appended 
hereto. 

The continued agitation to protect the workers in the paper 
industries from the extremely long and unreasonable hours of 
the two-tour shifts, which constitute practically a twelve-hour 
day and seventy-two-hour work week, where such mills are 



1917.] HOUSE — No. 1850. 129 

operated continuous^ for twenty-four hours, was caused by the 
absolute inhumanity, and the danger to the health and the 
well-being of the workers. Such working hours are intolerable, 
— nothing less than industrial slavery; a condition, which, if 
permitted to continue, would be a stain on the name of Massa- 
chusetts, whose record has been, and should continue to be, 
that of a leader in the world's industrial and humanitarian 
progress. 

Another reason that compels us to include other than the 
paper industry in the proposed law attached hereto is that we 
believe that if there are any other industries which are subject- 
ing any of their employees to the same long, unreasonable and 
devitalizing hours of toil, as has been evidenced in the two- 
tour shifts so bitterly complained of in the paper industry, we 
must* in all fairness also include such industries within the scope 
of this proposed law. If we restrict a law to the paper industry 
only, we could easily be accused of unfairly selecting one 
industry for attack. This is not our purpose, and thus it is 
obvious that justice demands that we treat all industries alike in 
a desire to protect all the workers within the Commonwealth 
who are now being, or who might be, compelled to labor, to 
the detriment of their health and happiness, more than eight 
hours. 

Will any citizen in Massachusetts say that a twelve-hour 
work day and a seventy-two-hour work week should not be 
prohibited by law, when such long hours are not only destruc- 
tive of the physical, moral and social well-being of the workers, 
and afford no opportunity for recreation, but also become a 
menace to the family life, allowing the father little or no time 
to enjoy his wife and children? 

Tour-workers testified before this Commission to the evils of 
such conditions of labor, and the manufacturers themselves 
were not in opposition to this testimony. Organized labor tour- 
workers emphatically stated that they would never return to the 
two-tour system, which meant that any attempt on the part of 
the manufacturers at any time to place the hours on the old 
basis would be resisted. Where the Commission found paper- 
mill workers under the two-tour shifts at work, it was informed 
that it is utterly impossible for the workers to continue under 



130 SOCIAL INSURANCE. [Feb. 

such long and oppressive Hours of labor. It was further told 
that they were organizing to demand a change to the three- 
tour shifts, — the eight-hour day. 

While the Commission did not have the opportunity to visit 
other industries than the paper industry where similarly long 
hours were said to exist, the common knowledge gathered from 
the evidence given at the several hearings was such as to compel 
us to ask that an eight-hour day law include all industries 
within its provisions. 

To the credit of more than 90 per cent, of the paper manu- 
facturers of Massachusetts it must be said that they have 
placed their mills upon the three-tour basis, making what is to 
all purposes an eight-hour day for each tour-worker. Many of 
these manufacturers are agreed that greater efficiency is 
obtained on the eight-hour basis — the three-tour shifts — than 
under the twelve-hour day of the two-tour shifts, and that the 
three-tour shifts, with this increased efficiency, have been suf- 
ficiently productive to offset the cost of the shorter hours — 
the eight-hour day — given their tour-workers. Many of them 
admitted that the two-tour shift is dangerous to the health and 
well-being of the workers, but they opposed the enactment of 
such an eight-hour day law principally for two reasons, — first, 
they held that, if competitive conditions arose outside of Massa- 
chusetts, and the paper manufacturers of other States should 
return to the two-shift basis, they desired to be able to do like- 
wise without the interference of law; second, they were positive 
in their opposition to the establishment of a legal eight-hour 
day in Massachusetts. 

Both of these contentions appeared to us to be based upon 
no just or solid foundation. The objection to the establish- 
ment of an eight-hour day is not viewed by us as a dangerous 
innovation and inimical to the interests of the industries of the 
State, and we submit candidly for consideration, as upholding 
our point of view, the labor legislation of recent years in this 
Commonwealth lessening the hours of labor for women and 
minors in industries. These laws were passed on broad human- 
itarian grounds, and have been a positive betterment for all 
concerned. We know from past experience that, when Massa- 
chusetts enacted laws of this character, other States were 



1917.] HOUSE — No. 1850. 131 

compelled by public opinion to enact, or voluntarily proceeded 
to enact, similar legislation, thus reducing the so-called danger- 
ous competition due to different hours of labor to an inconse- 
quential minimum. 

We further hold that, where the health and happiness of the 
workers are concerned, industry must shape its course accord- 
ingly, because industry in itself is not the first consideration of 
the State, and must be considered second to the welfare of the 
workers. 

While the coming of the positive eight-hour day may be 
temporarily delayed, its merits are such that they will create a 
momentous demand for it and its embodiment finally in our 
fundamental law. If a time should come, however, when 
economic and industrial conditions would seem to make neces- 
sary a return to the two-tour shift, — the twelve-hour work 
day, — there would undoubtedly be an opportunity to have 
any law which interfered with necessary needs modified or 
repealed. 

At this point it is interesting to note what Mr. Charles 
Sumner Bird, himself a paper manufacturer of years' experience, 
of the firm of Bird & Son, of Walpole, Mass., has to say in a 
letter to this Commission concerning the problem and the 
imperative need and justice of such legislation. Mr. Bird said : — 

In paper mills which run twenty-four hours continuously, I think that 
the two-tour system, twelve-hour day, seventy-two hour week is intolerable 
and should be stopped by the State. It is a menace to the workers' health, 
in that thirteen hours at night and eleven hours during the day are op- 
pressive, especially in those mills operating under hot and moist condi- 
tions; it is a menace to the welfare of the family life, in that it allows the 
father little or no time to see and enjoy his wife and little children. No 
man who has worked in a paper m 11 seventy-two hours a week for any 
considerable length of time doubts that a two-tour twelve-hour per day 
system is deleterious to health and to decent living conditions. 

The argument that the eight-hour or three-tour system will drive paper 
mills out of Massachusetts falls to the ground in face of the fact that many 
paper mills in Massachusetts, and in the country, are now on the three- 
tour system. Fifteen years ago I put my paper mills on the eight-hour 
system, and my business is as competitive as any I know of. I doubt 
whether the three-tour system adds much to the cost of paper, but whether 
it does or not is of no consequence compared to the importance of con- 
serving the physical well-being of the workers now engaged in the excessive 
hours prevailing in the two-tour mills. 



132 SOCIAL INSURANCE. [Feb. 

Mr. Bird has stated to a member of this Commission, more- 
over, that he emphatically favors the extension of the eight- 
hour shift to all industries operated continuously for twenty- 
four hours. 

From statements made to this Commission by the tour- 
workers now working under the eight-hour system it is evident 
that they are unwilling to trust the keeping of their present 
eight-hour day to the decision of their employers alone. They 
had struggled, they said, to secure such conditions which they 
are now enjoying, and they want the limitation of their hours 
of labor protected by law. This appears to us to be a reason- 
able demand, and legislation, accordingly, should be enacted. 
Moreover, their side of the case contained the positive demand 
from them that the State protect their health and well-being. 

There are those who maintain that the passage of such a law 
would have a disconcerting effect upon industry. With this 
we do not agree, for we are just as sure that whatever protects 
and advances the social welfare of the workers must equally 
advance the prosperity of any industry. 

In some of the hearings held by the Commission in the sev- 
eral cities there was an absence of workers, which might seem 
to indicate that the workers are not interested in having 
shorter hours, although they are working long hours on the 
two-tour basis, — twelve-hour day. But it is commonly 
known that workers, and especially the unorganized, have some 
fear about appearing at hearings in opposition to their em- 
ployers, when their appearance before a commission on such a 
proposition might result in the loss of the family's bread and 
butter. This absence, therefore, should not be construed to 
emphasize any lack of interest on their part in the lessening of 
their hours of labor. Then again we know that few work- 
ingmen can be as well represented as their more powerful em- 
ployers. Many of them lack the aggressive confidence displayed 
by the manufacturers at such hearings, and it is not to be 
expected that they can as readily or as easily present their cases. 

When the fire prevention and health laws for industrial plants 
were first advocated they were opposed with the same argu- 
ments which are now being used against the reduction of hours 
of labor herein mentioned. Manufacturers maintained it was 



1917.] HOUSE — No. 1850. 133 

unnecessary to have such laws, for many of them had put into 
practice all that these proposed laws required. Yet we believe 
these laws of great value in preventing a return to dangerous 
conditions. Having in mind this preventive principle, we 
further urge the enactment of our proposed law. 

As always, when humanitarian legislation of this character is 
proposed, with its prime purpose to conserve the health and 
happiness of our people, — of any part of the industrial army, — 
the haze of unconstitutionality is put forth to befog the issue, 
to blind the vision and to destroy the vital purpose and the 
honest effort in' behalf of such just measures. The unconstitu- 
tionality of any interference with the contractual relations 
between employee and employer is discussed and debated to no 
fruitful end, for after all we are not the judges of constitutional 
rights and cannot well believe that such opinions are of value 
from the judicial standpoint. We know, however, that it is 
our duty, if the evidence warrants, — and it has warranted it, 
— to protect the workers so that no employer will be able from 
any motive to destroy the health and happiness of a single 
toiler in industry in Massachusetts. 

Therefor, we recommend legislation, as hereinbefore outlined, 
for this purpose; and we have faith that our courts, if called 
upon to deliberate upon the constitutionality of the vital pur- 
pose of such a law as we propose for the general welfare, will 
deal with it with the modern understanding and ability which 
such a great problem requires. The act which the undersigned 
submit follows. 

EDWARD G. MORRIS. 

WENDELL P. THORE. 

EDNA LAWRENCE SPENCER. 



An Act to regulate the Hours of Labor of Certain Employees in 
Industries operating Day and Night. 

Be it enacted, etc., as follows: 

Section 1. No person who is employed as a worker in any industry 
which is in operation both day and night, either continuously or intermit- 
tently, shall, except in case of emergency, be required, requested or per- 
mitted to work more than forty-eight hours in any one week or more than 
eight hours in any one calendar day. 



134 SOCIAL INSURANCE. [Feb. 

Section 2. Only a case of danger to property, to life, to public safety 
or to public health shall be considered a case of emergency within the mean- 
ing of this act, except in case of employment for the repair, renewal, ad- 
justment or care of machinery or appliances in order to maintain the same 
in continuous operation, and except in case of employment of a worker in 
substitution for and in the temporary absence of another. 

Section 3. For the purpose of this act the expression " worker" shall 
mean any employee who tends, or is employed for the purpose of tending, 
machinery or appliances of any description which are operated both day 
and night, either continuously or intermittently, and shall be deemed to in- 
clude machine tenders and their helpers, cutter tenders and all other 
persons whose attendance is required in consequence of the continuity of 
operation of such machinery or appliances. 

Section 4. Any owner, superintendent or other agent in any such 
industry who requires, requests or permits any person therein employed 
as a worker to work more hours than herein specified during any one cal- 
endar day or during any one week, except in case of emergency as herein 
denned, shall be punished by a fine of not less than fifty dollars nor more 
than one hundred dollars for each offense. 

Section 5. It shall be the duty of the state board of labor and industries 
to receive complaints concerning alleged violations of this act, and to make 
or direct thereupon all needful and proper investigations and prosecutions. 

Section 6. This act shall take effect upon the first day of September 
in the year nineteen hundred and seventeen. 



1917.1 HOUSE — No. 1850. 135 



STATEMENT OF SENATOR FARNSWORTH AND REPRESENT- 
ATIVE WOODILL. 

The undersigned, a minority of the Commission, find them- 
selves unable to join with a majority of the Commission in 
recommending legislation limiting the hours of labor of em- 
ployees in the so-called "continuous industries/' They regret 
that they are unable to subscribe to the views of the other 
members with reference to this part of the Commission's report. 
They are, however, in accord with their associate members of 
the Commission who maintain that the hours of tour-workers 
in the two-shift paper-making industries are too long. They 
heartily endorse this principle without any reservations, but 
are decidedly opposed to the idea of recommending legislation 
at this point, when practically all this class of industries in 
Massachusetts have already voluntarily adopted the shorter 
hour plan, and in view of the fact that there is every indication 
that the other manufacturers are contemplating such a course. 

At this point, with reference to the recommendations of three 
members of the Commission as to a law fixing the number of 
hours of labor of employees in every continuous industry in 
the Commonwealth, the undersigned do not regard legislation 
of so broad a character necessary. They are of the opinion 
that it is premature, to say the least, to recommend a law so 
far-reaching in its scope. Outside the paper-making industry 
no evidence has been presented to the Commission which would 
indicate either the existence of a demand or justifiable necessity 
therefor. Furthermore, in view of the fact that the evidence 
presented to the Commission during its study of the hours of 
labor in continuous industries deals wholly with the paper mills, 
they will in their statement confine themselves to a discussion 
of that evidence. 

It developed at the hearings held by the Commission in the 
principal paper-making cities in the State that 90 per cent, of 
the paper manufacturers in Massachusetts are now operating 
their mills on the three-tour eight-hour basis, and that in the 
city of Holyoke and in other parts of the State a great number 
of these mills had adopted the shorter hour system since 1912. 



136 SOCIAL INSURANCE. [Feb. 

The undersigned believe, after mature reflection and after 
giving due consideration to all statements made by those who 
appeared before the Commission, that most of the manu- 
facturers fully recognize the fact that the shorter shift is the 
better policy. The evidence submitted would further indicate 
that they are rapidly putting their mills on this working basis, 
and it would appear that it is only a question of time when all 
the paper mills in the Commonwealth will have put this scheme 
into operation. 

In their opinion, to pass a law at this juncture in the State 
of Massachusetts, arbitrarily fixing the number of hours which 
a man should work, would be establishing a bad precedent, 
and would be inexpedient for the reason that it would be the 
first legislation put on the statute books regulating the hours 
of labor of men in private industry in Massachusetts. As 
already stated, the manufacturers are adopting the three-shift 
system gradually, and, it appears, as rapidly as industrial labor 
conditions will permit. It seems therefore, to be by far the 
better policy to leave the adjustment of this matter to the 
employers and employees. The effect of enacting such laws, 
as a majority of the Commission recommend, at this time would 
have a disturbing and disconcerting effect upon industry. It 
would, in the opinion of the undersigned, be an unwise inter- 
ference with the rights of the employers and employees 
mutually to agree on better working hours. They believe also 
that it would be depriving the manufacturers and employees of 
their constitutional rights. 

As stated in another part of the report, the Commission has 
given more hearings on the subject of restricting the hours in 
continuous industries than on any other one subject it has had 
to study. In addition to seven hearings, which were announced 
and fully advertised to deal exclusively with this subject, the 
topic has come in for discussion and consideration at several 
other hearings. The public hearings given in Pittsfield, Hol- 
yoke and Fitchburg dealt entirely with the hours of employees 
in continuous industries. These hearings were especially well 
advertised in all the local newspapers, and by promiscuous 
posted announcements. Notwithstanding this fact, however, 
and that the Commission had arranged special evening hearings 



1917.] HOUSE — No. 1850. 137 

for the convenience of the tour-workers, as well as in the day- 
time, at two of the public evening hearings — in Pittsfield and 
Fitchburg — no one appeared to endorse the so-called tour- 
workers' bill, nor to protest against bad working conditions in 
the mills. In the vicinity of Pittsfield there are mills operating 
on the longer hour two-shift system, and it appeared from 
testimony given at the Fitchburg hearing that there are mills 
in the vicinity of Fitchburg also operating on two shifts. The 
minority regards it as rather significant that the greatest 
demand for this proposed legislation should have come from 
the tour-workers in the city of Holyoke, where every mill is at 
the present time working on the three-shift plan. Since all the 
men, practically, who appeared at the evening hearing of the 
Commission in the city of Holyoke, to endorse and recommend 
legislation establishing the three-tour system throughout the 
Commonwealth, were union members, their appearance and 
interest for this particular legislation would appear to have been 
on the general principles for which the labor unions stand. At 
a subsequent hearing held in Boston, at the request of a large 
number of manufacturers, for the purpose of giving the opposi- 
tion a chance to be heard further, some of the same members 
of the Holyoke Union were present, and again appealed to the 
Commission to recommend restrictive legislation. 

The minority of the Commission have gathered the impres- 
sion from much of the testimony given at the hearings on this 
subject that in most of the paper mills the very best of feeling 
exists at the present, time between the manufacturers and 
workmen. It seems to these members that the manufacturers 
have the interest of their employees at heart and are doing all 
in their power to improve the working conditions and to make 
the mills attractive to them. They were particularly impressed 
by the statements made by certain of the older mill owners as 
to the length of time that many of their employees had been 
with them. They believe this would not be the case if the 
working conditions had been as unsatisfactory as some would 
have us believe. There were certain manufacturers who testi- 
fied that the passage of a law requiring them at once to change 
over their system of working hours could only result dis- 
astrously. These men operate small mills and do not employ 



138 SOCIAL INSURANCE. [Feb. 

a great number of men. Most of their tour-workers are men 
who have been with them several years and are skilled in their 
particular line, and to obtain sufficient additional help and train 
them in the work would appear to be rather difficult, in addi- 
tion to substantially increasing the operating expense. 

The undersigned are further of the opinion that if any legis- 
lation is required regulating the hours of men in this class of 
industry it should be national rather than State legislation. A 
great many of the manufacturers were questioned with regard 
to this point, and frankly expressed themselves as not being 
opposed to Federal legislation on this matter. 

Therefore, for the reasons above stated, the undersigned 
refrain from reporting any legislation at this time, and beg 
respectfully to dissent from the accompanying reports. 

FRANK S. FARNSWORTH. 
HARRY C. WOODILL. 



1917.1 HOUSE — No. 1850. 139 



STATEMENT OF JOHN P. MEADE AND EDWARD G. MORRIS. 

We endorse the so-called three-shift eight-hour system in all 
industries operating continuously, and report a bill (Appendix D, 
page 305) extending the three-tour system to all paper-making 
industries operating continuously twenty-four hours a day in 
the State. 

A greater number of hearings have been given on this subject 
than on any one of the others which the Commission had to 
study. The fact that so large a number of employers in the 
paper industry have already voluntarily adopted the three- 
shift eight-hour system, and have found it a practical method 
of business, has commended itself to us as one of the principal 
reasons • for supporting such legislation. Legislation of this 
character has been opposed by the manufacturers because, — 

First, it would cripple their ability to compete with out-of- 
State manufacturers operating on the two-shift system, and for 
that reason they do not approve of any proposed law which 
will prevent Massachusetts manufacturers from returning to 
the two-shift working basis. 

Second, it would increase the cost of production, and the ad- 
ditional labor required would be difficult to find at the present 
time. 

Third, such a bill would be unconstitutional and would take 
away the freedom of contract. 

Fourth, legislation of this nature should emanate from na- 
tional rather than State authority. 

With regard to the first objection, the Commission has in- 
formation from authoritative sources to support the contention 
that no substantial operating loss has resulted in paper mills 
where the change from the two-tour to the three-tour system 
has been effected. On the other hand, it was brought out at 
some of the hearings of the Commission that efficiency had been 
promoted, and that the immediate increased wage cost had 
been almost if not quite offset, in cases where industries had 
changed to the new shorter basis. At this point it is significant 
to observe that there has been no disposition on the part of the 
employers in any case to return to the old two-shift twelve hour 
a day system. 



140 SOCIAL INSURANCE. [Feb. 

The second objection has been answered in part by the above 
paragraph. With regard, moreover, to the problem of provid- 
ing extra labor in mills changing over to the three-shift eight- 
hour plan, there has been no substantial difficulty in securing 
the additional help necessary to establish the change. As to 
the constitutionality of such legislation and its interference 
with the freedom of contract between employer and employee, 
— the ground upon which the third objection of the opposition 
is made, — we are of the opinion that this question should be 
left to the decision of the Legislature and the courts. We 
would, however, respectfully call the attention of the General 
Court to labor legislation adopted in recent years affecting the 
hours of women and minors in industries. Those laws were 
passed for health and humanitarian reasons, and have been 
well enforced with good results. They have not been declared 
unconstitutional. 

The act which is presented herewith is one readily adapting 
itself to the different emergencies which arise in connection with 
employment in paper industries. The law is so drawn that if 
enacted it will in no way interfere with the industries which 
have already adopted the eight-hour shift. In addition, how- 
ever, to requiring the twelve-hour two-shift industries to adopt 
the eight-hour three-shift system, it provides for the continu- 
ation of the system in plants already operating on that basis. 
We are of the opinion that the evil of the two-tour plan is so 
great that the few mills in the Commonwealth operating under 
it at the present time should be required, for the good of their 
employees, to adopt the three-tour plan. 

The Commission selected the paper-making industry more 
specifically for its investigation, because for the most part the 
demand for legislation has come through that industry. A per- 
sonal visit to the mills by day and at night enabled the mem- 
bers of the Commission to see for themselves the actual condi- 
tions under which some of the so-called "tour-workers" 
labored. Evidence gathered leads to the conclusion that. the 
health and moral conditions of the paper workers have improved 
materially under the three-shift plan. The two-tour system does 
not allow the worker sufficient time for recreation. It is not 
conducive to the best development of home life. The hours 



1917.] HOUSE — No. 1850. 141 

are so long that he is barely able to find time in which to sleep 
and eat. There is little if any time for the consideration of 
those duties that are associated with good citizenship. There 
seems to be no question but what there has been an increased 
efficiency among the employees where the two-tour system has 
been abandoned in favor of the three-shift plan. We believe 
that the two-shift system is archaic and has little to commend 
itself, and while we fully recognize the disposition on the part 
of a majority of the manufacturers of the Commonwealth 
voluntarily to adopt the eight-hour plan, we strongly advocate 
the adoption of the three-shift eight-hour system for all the 
tour-workers in the paper industry of Massachusetts. 

A number of workers who appeared at the hearings of the 
Commission were men who had worked for a considerable 
period of time under both the two and three tour systems. 
Most of these men were familiar with all branches of paper 
making, and had worked under all condit'ons existing in the 
paper industries. We were impressed with the intelligence 
displayed by the operatives who testified, and the frank manner 
in which they answered all queries put to them. Striking 
instances of decided improvement in the health of workers who 
had changed to the three-shift, shorter hour system, after hav- 
ing formerly worked on the two-tour twelve-hour schedule, 
were brought to the attention of the Commission. It was 
declared by some of the workers that they had experienced a 
decided gain of weight under the shorter hours of work, and 
they also maintained that they had gained in strength and 
vigor, and felt sure they were rendering better and more 
efficient service to their employers under the new regime than 
ever before. It seemed to be the unanimous opinion of all the 
operatives who were questioned by members of the Commission 
that under no circumstances would they return to the old 
two-tour plan. 

We are aware that even under the provisions of this bill men 
and women may be employed more than eight hours in paper 
mills in other than "tour work," and that tour- workers, men 
in the prime of health, will work eight hours, and women, not 
tour- workers, may work nine hours in the same mill. We 
recognize, however, that continuous employment in which 



142 SOCIAL INSURANCE. [Feb. 

employees work during some weeks on day shifts and during 
other weeks on night shifts is far more taxing than regular day 
employment. It has been found, further, in the paper industry, 
that the practical way to operate three shifts or tours is to 
divide the day into three equal parts, which division of neces- 
sity makes the shifts eight hours each. The fact that others, 
not tour-workers, work nine hours in the same mill is not a 
sound argument against a system of eight hours for the "tour- 
workers," or eleven and thirteen hours as the only alternate 
proposition. The shifts must, under present business methods, 
be either eight-hour shifts or eleven and thirteen hour shifts, 
and it is of more consequence to remedy the hardship of eleven 
and thirteen hour employment than to magnify the importance 
of the seeming inequality in eight-hour employment for tour- 
workers and nine-hour employment for day workers. 

JOHN P. MEADE. 
EDWARD G. MORRIS. 



1917.1 HOUSE — No. 1850. 143 



STATEMENT OF ALLISON G. CATHERON AND EDEN K. 

BOWSER. 

The undersigned, while uniting with the majority in the opinion 
that the two-shift plan in industries operated continuously day 
and night results in excessive hours of labor for certain employees, 
and that, in the interest of public welfare, such employment 
should be prohibited, do not believe the correct remedy is one 
limiting by express statement the hours of labor to eight. 

Such a proposition can only be supported by evidence show- 
ing that it is injurious to public health and the general welfare 
to work for any period longer than eight hours a day, as, for 
instance, nine hours. In our opinion no evidence has been 
submitted to this Commission that employment of adult men 
for a period of nine hours a day is injurious to public health, 
nor do we believe such to be the fact. We are satisfied that 
there is sufficient evidence to show that employment for more 
than eleven hours as practiced in certain industries is excessive 
and injurious to health. What the least number of hours is 
which may properly be regarded as excessive we are unable to 
say, nor do we think it necessary to determine; but we are 
satisfied that ordinary employment for more than eleven hours 
a day is so excessive that it should be forbidden by law. The 
proper legislative approach to this problem we believe to be to 
forbid the thing which is wrong, namely, employment for a 
period known to be excessive, not to require that hours be 
limited to a period which may be considerably within the point 
at which excess begins. 

We therefore submit a bill (Appendix D, page 304) in accord- 
ance with our view. If such a law is enacted it is for the em- 
ployer to adjust his business to conform to it. It may be that 
the only practical way to do this is to adopt the three-shift 
plan, but such a question, we submit, is within the province of 
the employer to determine. 

In our opinion the bill which we propose is much more likely 
than the bills proposed by the majority to prove constitutional, 
and in actual operation will secure quite as valuable results. 

ALLISON G. CATHERON. 
EDEN K BOWSER. 



144 SOCIAL INSURANCE. [Feb. 



STATEMENT OF SENATOR McLANE. 

I desire to state my conclusions, as a member of the Com- 
mission on Social Insurance, in regard to the problems presented 
to the Commission for study and report. In common with the 
citizens of this Commonwealth I recognize that, without 
further study and investigation, the adoption of all the meas- 
ures presented by the majority of the members of this Commis- 
sion, within the limited and absolutely inadequate time at our 
disposal, would shake the foundation of our social, political 
and financial structure. In other words, I regret that all their 
efforts have been devoted to building an alluring superstructure 
with very little consideration given to the foundation. 

Even though I am in absolute sympathy with the object that 
is desired to be obtained, I maintain that no legislation on this 
matter is preferable, by far, to ill-timed, poorly considered 
and hastily drawn legislation with leads — no man knows 
where. 

I am emphatically in favor of a recommendation for the 
adoption of the three-shift, so-called "tour-workers" bill in 
paper mills for the health and welfare of the employees. The 
subject-matter of this problem has been carefully discussed, 
investigated and weighed for the past three years. 

As to non-contributory old-age pensions, while I favor the 
proposition in the large, I also recognize that the importance 
of the subject demands further careful study, investigation and 
report, for the following reasons: — 

That the subject partakes of the character of national as well 
as State legislation, and might well be investigated jointly, in 
order to co-ordinate with the various forms of relief and charity 
now in effect and with the operation of the immigration and 
naturalization policy of the Nation. 

That we have not yet complete information as to the pensions 
now granted in both State and Nation. There should be a care- 
ful study on this subject in order to provide that all inequal- 
ities be removed and yet no injustice be done the individual. 

That the question must be first decided as to whether the 
granting of non^contributory pensions is constitutional or not. 
In this connection I respectfully refer to the opinion of the 



1917.] HOUSE — No. 1850. 145 

justices of the Supreme Judicial Court, 186 Mass. 603, on 
chapter 458 of 1904, on a so-called bounty act. 

While my sympathy must naturally be with any just system 
of relief for the producers of the State, I cannot be led astray 
by the illusion that a system of old-age pensions, more or less 
restricted, which may operate fairly well in the autocratic 
militarism of Germany, and which is questionable yet in the 
democratic monarchy of England, or the system in operation 
in New Zealand, which is overwhelming that country in debt, 
is going to fit itself automatically into the representative form 
of government in this Commonwealth without being a tremen- 
dous drain upon the laboring man in the form of taxes. 

I agree to a large extent with the opinion voiced by our labor- 
ing men: "If this be charity, we don't want it; if it be increase 
in wages, let us have it now." 

When the question of health and unemployment insurance 
has been properly studied and developed so that our fundamen- 
tal, economic structure may become stable to the extent that 
employment and labor can be co-ordinated in all their stages 
with existing conditions, it may be advisable to recommend 
then that such forms of insurance should be operated under 
State, or preferably Federal, control and management. 

As a final word, it may be opportune to suggest that this 
Commonwealth stands in the none too favorable position of 
having the second largest debt in the list of States, totaling 
net, $85,000,000, — an amount exceeded only by New York. 
Under the conditions I cannot but emphasize the need for 
further study and the fullest investigation of all the subjects, 
viz., health insurance, old-age pensions and unemployment, 
before committing the Commonwealth to any plan. 

WALTER E. McLANE. 



APPENDICES. 



Appendix A. 



HEALTH INSURANCE. 

An Act to establish a System of Compulsory Insurance to fur- 
nish Benefits for Employees in Case of Death, Sickness and 
Accident, not covered by Workmen's Compensation, and for 
their Dependents in Case of Sickness and Accident, and to 
furnish maternity benefits, and to provide for contributions 
by Employers, Employees and the Commonwealth, and to 
create the health insurance commission. 

Be it enacted, etc., as follows: 

Part I. 

DEFINITIONS AND PERSONS INSURED. 

1 Section 1. Recognizing that it is necessary to provide proper care 

2 for employees during sickness and pecuniary support for themselves 

3 and their families during periods of inability to work on account of 

4 sickness, in order to prevent the spread of disease and to protect the 

5 health of the citizens of the commonwealth, and recognizing that 

6 modern industrial and social conditions have a part in causing 

7 sickness among wage earners, the general court judges compulsory 

8 insurance against sickness to be for the good and welfare of this com- 

9 monwealth and of the citizens of the same. 



Definitions. 

1 Section 2. When used in this act : — 

2 " Commission" means the health insurance commission. 

3 "Fund" means a local or a trade fund as the case may be. 

4 " Society" means an approved society, viz.: a labor union, a benev- 

5 olent or fraternal society, or an establishment society, authorized to 

6 carry insurance under this act. 

7 "Hospital" includes sanatorium unless otherwise provided. 

8 "Insurance" means health insurance under this act. 

9 "Disability" means inability to pursue the usual gainful occupation. 

10 "Employer" means a person, partnership, association, corporation, 

11 the legal representative of a deceased employer, or the receiver or 



150 SOCIAL INSURANCE. [Feb. 

12 trustee of a person, partnership, association or corporation and the 

13 commonwealth or a municipal corporation or other political division 

14 thereof. 

15 " Home-workers" are persons to whom articles or materials are 

16 given out to be made up, cleaned, altered, ornamented, finished or 

17 repaired, or adapted for sale, in the worker's own home, or on premises 

18 not under the control or management of the employer. 

19 " Earnings " shall include actual expenditures for or reasonable value 

20 of board, rent, housing and similar advantages given employees by 

21 the employer. 

Compulsory Insurance. 

1 Section 3. Every person employed in the commonwealth, except 

2 those receiving regular salaries in excess of one hundred dollars a 

3 month, unless exempted under section five of this act, shall be insured 

4 in a fund or society as provided in this act. 

Bailment. 

1 Section 4. For the purpose of this act, any person operating a 

2 vehicle or vessel for hire, the use of which is obtained under a contract 

3 of bailment, in consideration of the payment of a fixed sum or share 

4 in the earnings or otherwise, shall be treated as an employed person 

5 and the owner of the vehicle or vessel as an employer. 

Persons Exempt. 
1 Section 5. The following persons shall be exempt from the pro- 
2 • visions of this act : employees of the United States; employees of the 

3 commonwealth or of municipalities for whom adequate provision in 

4 time of sickness is already made through legally authorized means; 

5 inmates of charitable or reformatory institutions when employed for 

6 the purposes of the institution, with or without maintenance, if pro- 

7 vision for maintenance and medical attendance during sickness is 

8 made; casual employees not employed for the purpose of the em- 

9 ployee's trade or business; members of the family of the employer 
10 who are not paid money wages. 

Persons who may be Exempted. 

1 Section 6. The commission may exempt: home-workers, who 

2 owing to the irregularity of their work or other circumstances con- 

3 nected with their work, cannot for administrative reasons be included 

4 in the system of insurance; persons employed for periods of not over 

5 one week at temporary employment; members of religious societies 

6 employed in nursing, educational or other activities of public benefit, 

7 who receive no money compensation. 



1917.1 HOUSE — No. 1850. 151 



Voluntary Insurance. 

1 Section 7. Subject to the conditions of this act, the following 

2 persons may insure themselves voluntarily: self-employed persons 

3 whose earnings do not exceed one hundred dollars a month on an 

4 average; persons formerly compulsorily insured who, within one year 

5 from the date on which they cease to be insured, apply for voluntary 

6 insurance; members of the family of the employer who work in his 

7 establishment without wages. 



Part II. 

BENEFITS. 

Cases in which Benefits paid. 

1 Section 1. Benefits as provided in this act shall be paid or fur- 

2 nished in cases of sickness or accident, or of death or disability resulting 

3 therefrom, except cases in which any liability or compensation or 

4 other benefit is imposed by the workmen's compensation law, or in 

5 which liability for damages, compensation or other benefits is imposed 

6 by any act of congress. 

Reimbursement of Fund. 

1 Section 2. If benefits in the form of cash are paid to any person 

2 by any fund or society under this act in any case under which liability 

3 for compensation exists under the workmen's compensation law, such 

4 fund or society shall to the extent of such benefits be entitled to 

5 reimbursement out of such compensation, and upon notice to the 

6 carrier under the workmen's compensation law the claim for reim- 

7 bursement shall be a lien upon the compensation. If other benefits 

8 are furnished by the fund or society in such a case it shall, to the 

9 extent of the actual expenses incurred in furnishing such benefits, be 

10 subrogated to the right of the employee or of the person furnishing 

11 such benefits to reimbursement therefor under the workmen's com- 

12 pensation law. When treatment in such case has been begun by or 

13 through a fund or society the care of the case shall not be transferred 

14 to the carrier under the workmen's compensation law except upon 

15 the request of such carrier. 

Minimum Benefits. 

1 Section 3. Every fund or society must provide for its insured 

2 members as minimum benefits: medical, surgical, dental and nursing 

3 attendance and treatment; medicines and medical and surgical sup- 

4 plies; sickness benefit to the insured person or the dependent mem- 

5 bers of his family; maternity benefit; funeral benefit; medical, 



152 SOCIAL INSURANCE. [Feb. 

6 surgical and nursing attendance and medicines, and medical and sur- 

7 gical supplies, for dependent members of their families. 



Beginning of Right. 

1 Section 4. The right to benefits, with the exception of maternity 

2 benefit, begins with the day of membership. The maternity benefit 

3 shall be payable to any woman insured against sickness for at least 

4 nine months during the twelve months preceding the confinement, 

5 to the wife of any man so insured, and, as respects confinement for a 

6 child of her husband, to the widow of any man insured for at least 

7 nine months during the twelve months preceding his death. 

Medical, Surgical, Dental and Nursing Attendance and Treatment. 

1 Section 5. All necessary medical, surgical, and nursing attendance 

2 and treatment shall be furnished by the fund or society to insured 

3 persons and the dependent members of their families, from the first 

4 day of sickness or the happening of an accident, provided notice has 

5 been given; otherwise from the date of such notice. In case of dis- 

6 ability such attendance and treatment shall not be furnished to the 

7 same person for more than twenty-six weeks of disability in any 

8 consecutive twelve months. All urgently necessary dental services 

9 shall be furnished to insured persons, by the fund or society. In case 

10 the fund or society is unable to furnish the whole or any part of the 

11 benefit provided in this section, it shall pay the cost of such service 

12 actually rendered by competent persons at a rate approved by the 

13 commission. 

Medical and Surgical Service. 

1 Section 6. The fund or society, subject to the approval of the 

2 commission, and to provisions of part five, section seventeen, of this 

3 act, shall make arrangements for medical and surgical attendance 

4 and treatment by means of either: 

5 1. A panel of physicians to which all legally qualified physicians, 

6 surgeons, hospitals, dispensaries and associations of legally qualified 

7 physicians and surgeons, shall have the right to belong, and from 

8 among whom the patients shall have free choice, subject to the right 

9 of the physician or surgeon to refuse patients on grounds specified in 

10 regulations made under this act: provided, that the commission, on 

11 the recommendation of the medical advisory board, may limit in the 

12 interests of the medical service the maximum number of patients to 

13 be allowed a panel physician. Such maximum may vary in different 

14 districts. The payment of panel physicians shall be upon a visitation 
15^basis. 

16 j 2. On request of a fund or society, this commission, with the ap- 
17 K proval of the medical advisory board, may permit in combination 
18 with the panel sj^stem the employment of legally qualified physicians 



1917.] HOUSE — No. 1850. 153 

19 on salary: -provided, that freedom of choice by the insured persons 

20 among salaried and panel physicians be maintained. 

Nursing Service. 

1 Section 7. The fund or society, subject to the approval of the 

2 commission, shall make arrangements with nurses, dispensaries, hos- 

3 pit als or nursing organizations, for nursing attendance and treatment. 

Laboratory Facilities and Specialists. 

1 Section 8. The fund or society shall provide proper laboratory 

2 and other facilities for diagnosis and treatment, and shall make 

3 arrangements with specialists, including dentists, for consultations, 

4 treatments, and operations. 

Medical and Surgical Supplies. 

1 Section 9. Insured persons and the dependent members of their 

2 families shall be supplied with all necessary medicines, medical and 

3 surgical supplies, dressings, eyeglasses, trusses, crutches and similar 

4 appliances prescribed by the physician or surgeon. The supplies 

5 under this section shall not in any one year exceed fifty dollars for 

6 an insured person and the dependent members of his family. 

Hospital Treatment. 

1 Section 10. Hospital or sanatorium treatment and maintenance 

2 shall be furnished, upon the approval of the medical officer of the fund 

3 or society, instead of all other benefits (except as provided in Part II, 

4 sections eighteen, twenty-three and twenty-eight) with the consent 

5 of the insured member, or that of his family when it is not practicable 

6 to obtain his consent. The fund or society may demand that such 

7 treatment and maintenance be accepted when required by the con- 

8 tagious nature of the disease, or when in the opinion of its medical 

9 officer such treatment is imperative for the proper treatment of the 

10 disease or for the proper control of the patient. Sickness benefit may 

11 be discontinued (except as provided in Part II, section eighteen) 

12 during refusal to submit to hospital or sanatorium treatment. Such 

13 treatment shall be furnished during the period for which sickness 

14 benefit is payable, and shall be provided in a hospital or sanatorium 

15 with which the fund or society has made satisfactory financial arrange- 

16 ments approved by the commission, or in one erected and maintained 

17 by the funds and societies with the approval of the commission. 

Medical Officers. 

1 Section 11. Each fund or society shall employ at least one med- 

2 ical officer, who shall be a legally qualified physician and possess such 

3 other qualifications as the medical advisory board may prescribe. 



154 SOCIAL INSURANCE. [Feb. 

4 The appointment of a medical officer shall be subject to the approval 

5 of the local medical committee, but in case of failure or refusal to 

6 approve an appeal may be taken to the medical advisory board, 

7 whose decision shall be final. No medical officer shall practice in 

8 any other capacity under this act. 

Duties of Medical Officers. 

1 Section 12. A medical officer shall make such inspections and 

2 reports as the local medical committee shall direct, which reports, 

3 if of violation of sanitary laws, ordinances or regulations, and all 

4 other reports required by the health authorities, shall be forwarded 

5 by the health officer upon such committee to the proper health au- 

6 thority; and, upon charges of failure or neglect to make such inspec- 

7 tions or reports a medical officer may be removed by the arbitration 

8 committee after a hearing. The decision of the arbitration com- 

9 mittee shall be final. 

Local Medical Committee. 

1 Section 13. There shall be in each district formed in accordance 

2 with Part IV, section one, and in which there is a panel, a local med- 

3 ical committee of not less than seven or more than fifteen members. 

4 The commissioner of health in each city in which there is a com- 

5 missioner of health, or local health officer elsewhere, shall serve or 

6 appoint a member of his staff, who shall be a physician, as a member 

7 of the local medical committee of each district within his jurisdiction. 

8 The other members shall be legally qualified physicians and shall be 

9 elected for terms of three years, part by the physicians on the panel 

10 of the funds in the district, part by the staffs of attending physicians 

11 and surgeons of the hospitals which have made agreements with funds 

12 in the district to treat insured persons. The commission, subject to 

13 the approval of the medical advisory board, shall determine the pro- 

14 portion of members of the local medical committee to be elected by 

15 the panel physicians and by the attending physicians and surgeons of 

16 said hospitals. The committee shall elect its own officers and shall 

17 serve without compensation. 

Meetings of the Committee. 

1 Section 14. The committee shall meet at least once every month 

2 and may be called together at any time on three days' notice by the 

3 chairman or by a call signed by five members. A majority of the 

4 members of the committee shall constitute a quorum. 

Powers and Duties of the Committee. 

1 Section 15. All regulations and contracts affecting medical, sur- 

2 gical nursing or dental attendance and treatment made by the board 

3 of directors of a fund or society shall be submitted to the local medical 



1917.] HOUSE — No. 1850. 155 

4 committee of its district, and shall not take effect until after the next 

5 regular meeting of the committee, unless sooner acted upon by the 

6 committee, except that the board may issue temporary regulations for 

7 the period of three months. Any dispute in regard to such attendance 

8 or treatment or any charge brought against a physician because of 

9 his work for a fund or society shall be referred to the local medical 
10 committee of the district before action is taken by the board of di- 
ll rectors. If the committee and the board of directors cannot agree, 
12 the matter shall be referred to the arbitration committee. 

Arbitration Committee. 

1 Section 16. Any dispute between a fund or society and a physi- 

2 cian, or any dispute submitted as provided in Part II, section fifteen, 

3 shall be referred to an arbitration committee, one member appointed 

4 by the board of directors of the fund, one member appointed by the 

5 local medical committee, and a third member, who shall be chairman, 

6 appointed by a judge of the superior court or by a justice of the su- 

7 preme court in ' counties in which there is no county court. The 

8 decision of the arbitration committee shall be final unless an appeal is 

9 taken to the commission within ten days from the date on which the 
10 decision is rendered. 

Sickness Benefit. 

1 Section 17. A sickness benefit, equal to two thirds (sixty-six and 

2 two thirds per cent) of the weekly earnings of the insured member, 

3 shall be paid beginning with the fourth day of disability on account of 

4 illness or accident. It shall be paid only during continuance of dis- 

5 ability, and shall not be paid to the same person for a period of over 

6 twenty-six weeks in any consecutive twelve months. This benefit 

7 shall be paid to an insured woman when disabled on account of preg- 

8 nancy, except that it shall not be paid to her during the period when 

9 she is receiving cash maternity benefit. The weeks during which 

10 sickness benefit is discontinued because of refusal to accept hospital 

11 treatment shall be included in computing the period of twenty-six 

12 weeks. 

Sickness Benefit to Dependents. 

1 Section 18. A sickness benefit equal to one half (fifty per cent) 

2 of the earnings of the insured member shall be paid to his family, if 

3 any, or other dependents, if any, while he is in a hospital, sanatorium, 

4 or other institution or" while he refuses to submit to treatment. 

Certificate of Disability. 

1 Section 19. A certificate of disability shall be issued only by a 

2 medical officer, and only after his personal examination of the patient 

3 and upon a statement by the attending physician, if any. Sickness 

4 benefits shall be paid only upon a certificate of disability. A medical 



156 SOCIAL INSURANCE. [Feb. 

5 officer may visit at any time persons recommended for or receiving 

6 sickness benefits. 

Computation of Benefits. 

1 Section 20. For the purpose of computing the sickness benefit, 

2 weekly earnings shall be taken as the earnings during the last six days 

3 on which the employee worked full time preceding disability, not 

4 including earnings for overtime, unless such overtime is a regular 

5 occurrence in the employment; but if this computation would be 

6 unfair to the employee, his weekly earnings shall be taken as six 

7 times his average daily earnings for the days actually employed at 

8 full time during the three months preceding disability. 



Periods of Payment. 

1 Section 21. Sickness benefit shall be paid weekly where possible, 

2 and in no case less frequently than semi-monthly. 

Maternity Benefit. 

1 Section 22. Maternity benefit shall consist of: all necessary med- 

2 ical, surgical, nursing and obstetrical aid, materials and appliances, 

3 which shall be given insured women and the wives and widows of 

4 insured men. A weekly maternity benefit, which shall be payable to 

5 insured women only, equal to the regular sickness benefit of the in- 

6 sured, for a period of eight weeks, of which at least six shall be sub- 

7 sequent to delivery, on condition that the beneficiary abstain from 

8 gainful employment during the period of payment. Benefits under 

9 this section shall be in addition to all other benefits under this act. 



Funeral Benefits. 

1 Section 23. The fund or society shall pay the actual expenses of 

2 the funeral and burial of a deceased insured member, as arranged for 

3 by the family or next of kin, or in absence of such by the officers of 

4 the fund or society, up to the amount of one hundred dollars. This 

5 benefit shall be paid in case of death of a former insured member 

6 within six months after discontinuance of sickness benefits because of 

7 the exhaustion of the time limit, provided he has not, within those 

8 six months, become insured in another fund or society. 

Assignments and Exemptions. 

1 Section 24. Claims for benefits under this act shall not be assigned, 

2 released or commuted, and shall be exempt from all claims of creditors 

3 and from levy, execution and attachment or other remedy for recovery 

4 or collection of a debt, which exemption may not be waived. Benefits 

5 shall be paid only to the person or persons entitled to receive the same, 



1917.] HOUSE — No. 1850. 157 

6 or to some person who is liable Iry law or in fact for the support of 

7 such person or persons. 

Additional Benefits. 
,i Section 25. A fund or society may grant the following additional 

2 or increased benefits if the commission be satisfied that its income is 

3 sufficient for the purpose: (a) extension of sickness benefit to exceed 

4 twenty-six weeks but not to exceed fifty-two weeks; (b) funeral bene- 

5 fits for members of the family; (c) increased amount allowed for 

6 medical and surgical supplies and appliances; (d) increase in the 

7 period of extended insurance; (e) dental work in addition to that 

8 provided under Part II, section five, either up to a certain amount 

9 per year or b} 7 " contribution of part of the cost. 

Extension of Insurance. 

1 Section 26. When contributions cease on account of unemploy- 

2 ment not due to sickness, right to benefit under this act shall continue 

3 in force for one week if the insured person has paid contributions 

4 during four weeks immediately preceding unemployment, and for an 

5 additional week for each additional four weeks of paid up membership 

6 during the twenty-six weeks immediately preceding unemployment. 

Prevention of Disease. 

1 Section 27. Funds or societies, may, with the consent of the 

2 commission, and for purposes approved by the appropriate local or 

3 state public health authorities, make appropriations for prevention of 

4 disease and the education of its employer and employee members in 

5 disease prevention and hygiene, and include the amount so appro- 

6 priated among its expenses of administration. 



Part III. 

CONTRIBUTIONS. 

Apportionment of Contributions. 

1 Section 1. The full cost of insurance provided by this act, in- 

2 eluding contributions to the reserve and to the guarantee fund, shall 

3 be borne by employers, employees and the commonwealth in the 

4 following proportions: employers, two fifths; employees, two fifths, 

5 and the commonwealth, one fifth, except as provided in section two. 

Contributions of Low-paid Workers. 

1 Section 2. If the earnings of insured persons are less than nine 

2 dollars a week the shares of the employer and employee of the amount 

3 paid by them jointly shall be in the proportions indicated in the fol- 

4 lowing table : 



158 



SOCIAL INSURANCE. 



[Feb. 



If Earnings are Under — 


But not Under — 


Employer. 


Employees. 


$9, 


$8, . . . 


60% 


40% 


8, . 


7 


70% 


30% 


7 


6, 


80% 


20% 


6 


5, 


90% 


10% 


5, 




100% 


0% 









5 The contribution of the commonwealth shall remain one fifth of 

6 the total. 

Amount of Contributions. 

1 Section 3. The amount of the contributions shall be computed 

2 so as to be sufficient for the payment of benefits, the expense of ad- 

3 ministration of the fund and its reserve, and the maintenance of the 

4 guarantee fund. 

Payment of Contribution. 

1 Section 4. Every employer shall, on the date on which he pays 

2 his employees, or at least monthly, pay to any local or trade fund the 

3 total contributions due from him and from his employees to such 

4 fund. If such contribution is made at such time, he may deduct 

5 from the earnings of any employee the share of that empk^ee in the 

6 contribution, which shall be in proportion to his earnings, but must 

7 inform him, in a method to be approved by the commission, of the 

8 amount so deducted. Approved societies shall provide by regula- 

9 tion, to be approved by the commission, for the payment of contri- 

10 butions by their members. The employer of each such member shall 

11 be excused from contributing in respect to him to the local or trade 

12 fund, as above provided, only upon proof that such contributions to 

13 an approved society have been duly made in respect to such member, 

14 and not otherwise. 

Rates of Contributions. 

1 Section 5. In funds in which employees in several industries are 

2 insured, contributions may be fixed at different amounts for different 

3 industries according to the degree of sickness hazard in those industries, 

4 and shall be so fixed if the commission finds a substantial difference 

5 in the degree of sickness hazard. 



Establishments with Excessive Rates of Sickness. 

1 Section 6. If the establishment of any employer shows an 

2 excessive rate of sickness, a fund may, subject to the approval of the 

3 commission, increase the rate of contribution of such employer in 



1917.] HOUSE — No. 1850. 159 

4 proportion to the excess of such rate of sickness above the normal 

5 rate. Sucn additional contributions shall be paid by the employer 

6 without the right of deducting from the earnings of his employees. 



Part IV. 

CARRIERS. 

Division of the Commonwealth into Districts. 

1 Section 1. The commission shall, within six months after this 

2 act goes into effect, divide the commonwealth into districts, no one 

3 of which shall contain less than five thousand persons subject to 

4 compulsory insurance. 

Establishments of Fund. 

1 Section 2. The commission shall, before April first, nineteen 

2 hundred and eighteen, hold one or more hearings in each district, 

3 notice of which shall be given by advertisement in at least one news- 

4 paper published in the district and by any other method approved by 

5 the commission, and shall thereafter establish one or more funds, and 

6 in their discretion may establish one or more trade funds in such 

7 district. The commission shall then provide in each district for the 

8 election of delegates, half of whom shall be elected by employers, half 

9 by employees affected, to conventions for each fund which shall have 

10 power to adopt constitutions. The expense of the elections and con- 

11 ventions shall be paid by the commonwealth as expenses of the com- 

12 mission are paid. 

Consolidation or Division of District. 

1 Section 3. The commission at any time on its own motion or on 

2 the petition of the board of directors of any local or trade fund may 

3 consolidate two or more districts or detach a territory from one dis- 

4 trict and annex it to another, or create a new district from parts of 

5 several districts or from one district, already in existence, and shall 
-6 make such disposition of the property of the dissolved fund as shall 

7 seem to it proper. 

Establishment of Trade Fund. 

1 Section 4. On application of employers whose principal place of 

2 business or establishments are within the same district, and who 

3 employ two hundred and fifty employees in the same trade or branch 

4 of a trade, or on the application of two hundred and fifty employees 

5 employed in the same trade by employers whose principal places of 

6 business or establishments are within the same district, the commis- 

7 sion, after a hearing within the district, which shall be duly advertised 



160 SOCIAL INSURANCE. [Feb. 

8 and notice of which shall be sent to the boards of directors of the local 

9 and trade funds within the district, may authorize the formation of 

10 a trade fund, if there be no other trade fund within the district for 

11 the trade or the branch of the trade, and if the establishment of the 

12 new fund will not impair the solvency of any local or trade fund in 

13 the district. The new fund shall receive a proportionate share, to be 

14 determined by the commission, of the reserve and other property of 

15 each fund to which any of its insured members belong at the time of 

16 becoming members of the new fund. 

Temporary Establishment Society, 

1 Section 5. If a sufficient number of persons are employed tem- 

2 porarily, the commission, of its own motion, or on the application of 

3 the board of directors of any fund affected, may order the creation of 

4 an establishment society for the duration of the work. The com- 

5 mission shall divide any surplus left in such fund between the em- 

6 ployers and employees in proportion to the amount of their contribution 

7 after having provided for all the obligations of the fund. 

Authorization by Commission. 

1 Section 6. No fund shall begin business until it is authorized by 

2 the commission. The commission shall authorize a fund only after ap- 

3 proval and filing of its constitution and after the names and addresses 

4 of the board of directors elected for the first year have been filed with 

5 the commission. 

Dissolution of Fund. 

1 Section 7. The commission ma}^ after a hearing in the district 

2 for which a fund is established, withdraw its approval and dissolve 

3 the fund: if rendered necessary by the consolidation or division of a 

4 district; if the number of insured members is so small as to endanger 

5 the solvency of the fund; upon the petition of a majority of the 

6 board of directors or of the committee. 

7 The assets and propert} r of a dissolved fund, after provision for 

8 benefits and for the payment of its obligations, shall be divided among 

9 the funds and societies which its former insured members join, in 
10 such proportions as the commission may determine. 

Continuation of Existence of Dissolved Fund. 

1 Section 8. A dissolved fund shall, nevertheless, continue in exist- 

2 ence for the purpose of paying any existing obligations, disposing of, 

3 collecting and distributing its assets, and doing all other acts required 

4 in order to adjust and wind up its business affairs, and may sue and 

5 be sued for any of the purposes of this section . 



1917.] HOUSE — No. 1850. 161 



Powers of Funds. 

1 Section 9. Funds shall be corporations and shall have all the 

2 power necessary to cany out their duties under this act, including 

3 the power to verify by audit pay rolls of employer members for the 

4 purpose of determining contributions for which employer members 

5 are liable. 

Constitution of Fund. 

1 Section 10. Subject to the provisions of this act, the constitution 

2 of a fund shall contain: name of the fund and location of its principal 

3 office; if the fund is a trade fund, designation of the trade or trades 

4 for which it is created ; maximum percentages of earnings as provided 

5 in sections thirty and thirty-one of Part IV of this act, at which the 

6 regular contribution of employer and empk^ee may be fixed; which 

7 maximum, inclusive of the contribution of the commonwealth, shall 

8 not exceed four per cent of such total, except with the approval of the 

9 commission, and shall in no case exceed six per cent of such total; 

10 nature and amount of benefits and length of time during which they 

11 shall be given; manner of election, number, power, duties and time 

12 of meeting of all committees; number, powers, duties and time of 

13 meeting of the board of directors; method of amendment of consti- 

14 tution, and such other provisions as may be directed by the com- 

15 mission. 

Committee of the Fund. 

1 Section 11. There shall be a committee of each fund which shall 

2 consist of not less than twenty and not more than one hundred mem- 

3 bers, to be elected in the manner provided in the constitution, one half 

4 by the employer members of the fund, one half by the employee 

5 members. The committee shall cause an audit of the accounts of 

6 the fund to be made each year and shall pass upon the same and upon 

7 the annual report and budget of the board of directors. 

Employers' Votes. 

1 Section 12. Each employer member shall have as many votes 

2 for employer members of the committee as he employs workmen 

3 subject to the insurance who are members of the fund, except that 

4 no one employer shall have more than forty per cent of the total 

5 votes unless otherwise provided in the constitution. 

Board of Directors. 

1 Section 13. The board of directors shall consist of an even mum- 

2 ber of directors, not less than eight and not more than eighteen, one 

3 half of whom shall be elected by employer members of the committee 

4 and one half by employee members of the committee, and in addition, 



162 SOCIAL INSURANCE. [Feb. 

5 one director who shall be chosen for a term of three years by a ma- 

6 jority vote of the directors so elected. No one shall be a member of 

7 the committee and a director at the same time and all directors must 

8 be citizens of the United States and a majority of both employers and 

9 employee directors must be residents of the commonwealth. The 

10 directors elected by the members of the committee shall be elected 

11 for three years but the directors first elected shall by lot be divided 

12 into classes so that as nearly as possible an equal number shall go 

13 out of office each year. The compensation of the members of the 

14 board shall be not more than five dollars a day for each day of atten- 

15 dance upon the meetings of the board. No director shall hold any 

16 other office under this act. 

Removal of Directors. 

1 Section 14. If a board of directors violate or fail to comply with 

2 this act, the commission may, after a public hearing, remove the 

3 directors, appoint temporary directors, and call a meeting of the 

4 committee to elect directors to fill the unexpired terms of the directors 

5 removed. The directors appointed by the commission shall serve 

6 until the directors thereafter elected by the committee qualify. 

Appointment of Directors by Commission. 

1 Section 15. If at any time the number of directors be not suffi- 

2 cient to carry on the affairs of the fund, and if after notice from the 

3 commission, the committee fail to elect directors, the commission 

4 may appoint directors who shall serve until those thereafter elected 

5 by the committee qualify. 

Powers of the Board. 

1 Section 16. The board shall fill vacancies in its own number for 

2 unexpired terms, provided that only employers' representatives shall 

3 vote for employer directors, and only employees' representatives for 

4 employee directors; appoint all officers and employees of the fund 

5 and fix their salaries; elect a president and secretary from their own 

6 number; make regulations necessary for carrying out the purposes of 

7 the fund; make contracts with physicians, nurses, hospitals, dispen- 

8 saries, pharmacists, institutions and associations, and any other per- 

9 sons necessary for the business of the fund; prepare and submit to 

10 the committee annually a financial account and a report for the past 

11 year and a budget for the ensuing year; represent the fund and direct 

12 and administer its affairs, except as otherwise specified in this act. 

Officers' Bonds. 

1 Section 17. All officers of a fund who are intrusted with its moneys 

2 shall be bonded for amounts to be determined by the board of directors 

3 with the approval of the commission. 



1917.] HOUSE — No. 1850. 163 



Reserve. 

1 Section 18. Every fund shall accumulate a reserve. The board 

2 of directors shall transfer to such reserve one twentieth of the annual 

3 income of the fund until such reserve is equal to one sixth of the total 

4 expenditure for the preceding three years. 

Membership in Fund. 

1 Section 19. Every person subject to insurance shall, by virtue of 

2 this act and without regard to his physical condition, be an insured 

3 member of the trade fund of the trade at which and in the district 

4 in which he is employed, or, if there be no such fund, of such local 

5 fund of the district, as provided by the regulations of the commission : 

6 provided, that while he is a member of an approved society he shall be 

7 excluded by the board of directors from membership in a fund. The 

8 commission shall provide by regulation for the cases of persons regu- 

9 larly occupied at one trade but temporarily employed at another. 

10 Membership in a local or trade fund shall cease as soon as the insured 

11 person becomes a member of another local or trade fund. Every 

12 employer shall, by virtue of this act, be an employer member of all 

13 funds of which any of his employees are members. 

Membership in Societies. 

1 Section 20. A person subject to insurance shall become a mem- 

2 ber: — 

3 Of an establishment society on the day of entering employment in 

4 the establishment, and shall, except as otherwise provided by law or 

5 in the constitution or by-laws, cease to be such member on quitting 

6 employment in the establishment; 

7 Of a labor union or a benevolent or fraternal society on being ac- 

8 cepted by it, and shall cease to be such member on his resignation or 

9 expulsion, except as otherwise provided by law or in the constitution 
10 or by-laws. 

Membership during Disability. 

1 Section 21. Insured membership shall continue during receipt of 

2 sickness or cash maternity benefits or hospital treatment or during 

3 discontinuance of sickness benefit because of refusal to accept hospital 

4 treatment, except that no such insured member shall have a vote or 

5 be included in the number of insured members on which the vote of 

6 any employer member is based. 

Residents without the District. 

1 Section 22. If an insured person reside in the commonwealth, but 

2 temporarily or permanently outside of the district of the fund of 

3 which he is a member, the trade fund of the same trade, or if there 



164 SOCIAL INSURANCE. [Feb- 

4 be none, the local fund in the district in which he resides, shall supply 

5 the minimum benefits provided in this act and shall be reimbursed by 

6 the fund of which the insured person is a member. Other benefits 

7 shall be paid in cash if not provided for by agreements between funds 

8 or otherwise. The commission shall provide by regulation for insured 

9 persons residing permanently or temporarily without the common- 
10 wealth. 

Determination of District of Employment. 

1 Section 23. The district in which the establishment in which an 

2 insured person is employed, or if he be not employed in an establish- 

3 ment, the district in which the principal place of business of the 

4 employer is located, shall be, for the purpose of this act, the district 

5 of employment, but the commission may, for the convenience of 

6 administration either permanently or temporarily establish as such 

7 district that in which the insured member is actualfy employed or in 

8 which his wages are paid. 



Voluntary Insurance. 

1 Section 24. A person entitled to voluntary insurance must be 

2 admitted on application to membership in the trade fund of his trade 

3 in the district in which he is employed, or if there be no such fund, 

4 then in such local fund of the district as is provided by the regulations 

5 of the commission: provided, that except for persons who have been 

6 compulsorily insured persons within one month the by-laws of any 

7 fund may prohibit the admission to voluntary insurance of a person 

8 who has not passed a satisfactory medical examination by its medical 

9 officers. 

10 The contribution and benefits shall: (1) be based upon such an 

11 amount of earnings, in the case of a person formerly compulsorily 

12 insured, not exceeding the earnings upon which his contributions and 

13 benefits were based immediately preceding the date upon which he 

14 ceased to be so insured, and in the case of other voluntary members 

15 upon not more than actual earnings, nor more than one hundred 

16 dollars per month, as the member may elect; (2) be the same as for a 

17 compulsory member of the same trade. The full contribution in the 

18 case of a voluntary member shall be borne by the member and the 

19 state in the following proportion: the member, four fifths, and the 

20 state, one fifth. 

Loss of Voluntary Membership. 

1 Section 25. A person voluntarily insured shall lose his member- 

2 ship if he acquire membership, either voluntary or compulsory, in 

3 another fund or society, or if he be in arrears for one month in the 



1917.] HOUSE — No. 1850. 165 

4 payment of his contributions, unless this period be extended by the 

5 fund or society. 

Fines and Penalties. 

1 Section 26. Funds or societies may fine then* employer and 

2 insured members and suspend insured members from benefit for viola- 

3 tion of their rules or regulations or for fraudulent representations made 

4 with the intent of securing or aiding another to secure benefits, in 

5 accordance with rules approved by the commission providing for and 

6 limiting such fines or suspension, but contributions will in every case 

7 be required in respect to each suspended member. If an employer 

8 fail or refuse to pay any contribution due to funds under this act, the 

9 funds to which the contribution is due may recover from such employer, 

10 the whole amount of such contribution due from such employer and 

11 his employees with interest at six per cent by suit in a court of com- 

12 petent jurisdiction, and the employer shall not be entitled to deduct 

13 any part of such sum from the earnings of his employee or employees. 

Approved Societies. 

1 Section 27. A labor union, a benevolent or fraternal society or an 

2 establishment society shall be approved by the commission only after 

3 hearing the local or trade funds affected and only if it is not carried 

4 on for profit, but reasonable salaries paid officials shall not be con- 

5 sidered profit; it is under the absolute control of the insured members 

6 in so far as the insurance regulated by this law is affected, except that 

7 the employer may appoint one half of the governing body of an estab- 

8 lishment society; it shall satisfy the commission that it is in a sound 

9 financial condition; it grants at least the minimum benefits provided 

10 in this act; it has a membership of at least five hundred persons 

11 insured for at least the minimum benefits provided under this act or 

12 their equivalent, except that in the case of establishment societies 

13 in which the employer satisfactorily guarantees the payment of bene- 

14 fits, the minimum number of members may be determined by the 

15 commission; its operation will not, in the opinion of the commission, 

16 endanger the existence of any local or trade fund: in case of an estab- 

17 lishment society, a majority of the employees subject to insurance 

18 request approval, and the employer's contribution be at least equal to 

19 that of all the employees. 

20 The approval of the commission may be withdrawn at any time 

21 upon its finding, after hearing the society affected, that any of the 

22 required conditions are no longer satisfied. The commission may, 

23 after a hearing, permit an establishment society to accept as members, 

24 on conditions satisfactory to the commission, all persons subject to 

25 insurance in its district. 



166 SOCIAL INSURANCE. [Feb. 



Employers' Contributions. 

1 Section 28. The commission shall assess upon every employer, 

2 any of whose employees are insured in an approved society other than 

3 an establishment society, a sum equivalent to the employer's con- 

4 tributions had such employees been members of funds. This sum 

5 shall be paid in monthly installments into the guarantee fund estab- 

6 lished by the commission. 



Contributions of the Commonwealth. 

1 Section 29. The commonwealth shall contribute to every approved 

2 society, one fifth of its total expense for health insurance under this act, 

3 subject to the provisions of section nine of Part V of this act. 

Wage Groups. 

1 Section 30. A fund or society may, with the approval of the com- 

2 mission, divide its members into wage classes, and fix the rates of 

3 sickness and maternity benefits and the rate of contributions in each 

4 class. 

Basis of Contribution and Benefits. 

1 Section 31. A fund or society may, for the purpose of calculating 

2 benefits and contributions under this act, estimate the average earn- 

3 ings in any employment or grade or branch thereof, and on the approval 

4 of the commission the average so determined shall form the basis for 

5 the calculation of such benefits and contributions. 

Property of the Fund Tax Free. 

1 Section 32. The property of a fund, and such part of the property 

2 of airy approved society as is used for the purposes of this act, shall be 

3 exempt from all commonwealth, municipal or local taxes. 

Contributions a Preferred Claim. 

1 Section 33. Contributions due and unpaid shall have the same 

2 preference or lien, without limit of amount, against the assets of the 

3 employer as is now or hereafter may be allowed by law for a claim for 

4 unpaid wages for labor. 

Health Insurance Union. 

1 Section 34. Two or more funds or societies may combine for the 

2 administration of the medical benefit, subject to the approval of the 

3 commission. The commission may, after notice to and hearing of the 



1917.] HOUSE — Xo. 1850. 167 

4 parties in interest, withdraw its approval and dissolve the union, 

5 making such disposition of its property as may seem to it in the best 

6 interests of the insured. 

Part V. 

COMMISSION. 

Health Insurance Commission. 

1 Section 1. The health insurance commission is hereby created, 

2 consisting of five commissioners, to be appointed by the governor, 

3 one of whom shall be designated by the governor as chairman. Of 

4 the five members, one shall be a wage earner, one an employer, and one 

5 a physician. The term of office of members of the commission shall 

6 be five years, except that the first members thereof shall be appointed 

7 for such terms that the term of one member shall expire on January 

8 first, nineteen hundred and nineteen, and one on January first of each 

9 of the four succeeding years. Each commissioner shall devote his 

10 entire time to the duties of his office, and shall not hold any position of 

11 trust or profit, or engage in an}" occupation or business interfering with 

12 or inconsistent with his duties as commissioner, or serve on or under 

13 any committee of a political party. The commission shall have an 

14 official seal which shall be judicially noticed. 

Secretary. 

1 Section 2. The commission shall appoint and may remove a sec- 

2 retary, at an annual salary of three thousand six hundred dollars. The 

3 secretary shall perform such duties in connection with the meetings 

4 of the commission, and its investigations, hearings, and the preparation 

5 of rules and regulations under the provisions of this act, as the com- 

6 mission may prescribe. 

Officers and Employees. 

1 Section 3. The commission may appoint such officers, other as- 

2 sistants and employees as may be necessary for the exercise of its power 

3 and the performance of its duties under the provisions of this act, all 

4 of whom shall be in the competitive class of the classified civil service; 

5 and the commission shall prescribe their duties and fix their salaries, 

6 which shall not exceed in the aggregate the amount annually appro- 

7 priated by the legislature for that purpose. 

Salaries and Expenses. 

1 Section 4. The chairman of the co mm ission shall receive an annual 

2 salary of four thousand five hundred dollars, and each other commis- 

3 sioner an annual salary of four thousand dollars. The commissioners 



168 SOCIAL INSURANCE. [Feb. 

4 and their subordinates shall be entitled to their actual and necessary 

5 expenses while traveling on the business of the commission. The 

6 salaries and compensation of the subordinates and all other expenses 

7 of the commission shall be paid out of the treasury of the common- 

8 wealth upon vouchers signed by the chairman or one of the commis- 

9 sioners designated by him for that purpose. 



Offices. 

1 Section 5. The commission shall have its main office in the city 

2 of Boston and may establish and maintain branch offices in other cities 

3 of the commonwealth as it may deem advisable. Branch offices shall, 

4 subject to the supervision and direction of the commission, be in im- 

5 mediate charge of such officials or employees as it shall designate. 

Powers of Individual Commissioners. 

1 Section 6. Any investigation, inquiry or hearing which the com- 

2 mission is authorized to hold or undertake may be held or undertaken 

3 by or before any commissioner, and the award, decision or order of 

4 a commissioner, when approved and confirmed by the commission 

5 and ordered filed in its office, shall be deemed to be the award, de- 

6 cision or order of the commission. Each commissioner shall, for the 

7 purpose of this act, have power to administer oaths, certify to official 

8 acts, take depositions, issue subpoenas, and compel the attendance 

9 of witnesses and the production of books, accounts, papers, records, 
10 documents and testimony. 

Powers of Commission. 

1 Section 7. The commission may adopt all reasonable rules and 

2 regulations and do all things necessary to put into effect the provisions 

3 of this act. The commission shall, upon presentation of evidence, 

4 which shall have previously been presented to the medical advisory 

5 board, that any physician, surgeon, dentist or nurse, practising under 

6 the act, is incompetent, neglectful of his duty or dishonest, be em- 

7 powered to suspend or debar such physician, surgeon, dentist or nurse 

8 from practice under the act, and the decision of the commission shall 

9 be final. 

Payment of Commonwealth Contributions. 

1 Section 8. The commission shall estimate the contribution of the 

2 commonwealth annually before the first day of January of each year 

3 and shall, before that date, apportion it among the funds and societies, 

4 in proportion to their estimated expenditures for the purposes of this 

5 act during the year, and shall notify the treasurer of the commonwealth 

6 of the sum to be paid on March thirty-first, June thirtieth, September 



1917.] HOUSE — No. 1850. 169 

7 thirtieth, and December thirty-first of the current year to each fund 

8 and society. The treasurer shall pay the amount out of the unex- 

9 pended balance of any appropriation in his hands for the purpose. 



Guarantee Fund. 

1 Section 9. The commission shall reserve ten per cent of the con- 

2 tributions of the commonwealth to the funds and societies and pay it 

3 into a fund to be known as the guarantee fund, from which it may 

4 contribute for the relief of any fund or society on the application of 

5 its board of directors after investigation by the commission. A con- 

6 tribution shall be made only where, in the judgment of the com- 

7 mission, the necessity arises from epidemic, catastrophe or other un- 

8 usual conditions, and shall never be made where, in the opinion of 

9 the commission, the deficit is due to failure or refusal of the directors 

10 to levy proper rates of contributions. When and so long as in the 

11 opinion of the commission the guarantee fund is sufficient, the com- 

12 mission shall make no reservation for this purpose. 



Treasurer of the Commonwealth, Custodian of the Fund. 

1 Section 10. The treasurer of the commonwealth shall be the cus- 

2 todian of the guarantee fund, and all disbursements therefrom shall 

3 be paid by him upon vouchers authorized by the commission and 

4 signed by the chairman or another member designated by him in 

5 writing. The treasurer of the commonwealth shall give a separate 

6 and additional bond in an amount to be fixed by the governor and 

7 with securities approved by the auditor of the commonwealth con- 

8 ditioned for the faithful performance of his duty as custodian of the 

9 guarantee fund. The treasurer of the commonwealth may deposit 

10 any portion of the fund not needed for immediate use in the manner 

11 and subject to all the provisions of law respecting the deposit of other 

12 commonwealth funds by him. Interest earned by such portion of the 

13 guarantee fund deposited by the treasurer of the commonwealth shall 

14 be collected by him and placed to the credit of the fund. 



Report of Commission. 

1 Section 11. Annually, on or before the first day of February, 

2 the commission shall make a report to the governor, which he shall 

3 lay before the legislature, which shall include a statement of the ap- 

4 portionment of the contribution of the commonwealth, statistics of 

5 sickness experience under this act, a detailed statement of the ex- 

6 penses of the commission, the condition of the guarantee fund, together 

7 with any other matters which the commission deems proper to report, 

8 including any recommendations it may desire to make. 



170 SOCIAL INSURANCE. [Feb. 



Health Insurance Council. 

1 (Section 12. The health insurance council shall consist of twelve 

2 members, six of whom shall be elected by employer directors and six 

3 by employee directors of the local and trade funds; their term of office 

4 shall be two years, except that in the first election three of the em- 

5 ployer and three of the employee members of the council shall be 

6 elected for one year; they shall receive a compensation of five dollars 

7 a day for each day spent on the business of the council, and shall be 

8 reimbursed for reasonable expenses incurred in connection with such 

9 business, to be paid as other expenses of the commission are paid. 

Officers of Council. 

1 Section 13. The council shall elect a president from its own num- 

2 ber; the secretary of the commission shall act as secretary of the council. 



Meetings of Council. 

1 Section 14. The council shall meet during the first week of January, 

2 of April, of July, of September, each year. Special meetings shall be 

3 called by the president on the request of at least five members of the 

4 council or of two members of the commission, at any time. 



Duties of Council. 

1 Section 15. The annual report and recommendations of the com- 

2 mission shall be laid before the January meeting of the council before 

3 transmission to the governor, and the council may approve them or 

4 make a separate report and recommendations to the governor. All 

5 general regulations proposed by the commission shall be laid before 

6 the council at a regular or special meeting for discussion before final 

7 adoption, except in cases of urgency, to be determined by the commis- 

8 sion, and in this case the regulation shall be laid before the next regular 

9 meeting of the council or a special meeting called for the purpose. 



Medical Advisory Board. 

1 Section 16. There shall be a medical advisory board of eleven 

2 members. The commissioner of health of the commonwealth and the 

3 secretary of the state board of registration" in medicine shall be ex 

4 officio members of the board, seven members shall be chosen by the 

5 medical society of the state, and two by the homeopathic medical 

6 society of the state. The term of office of chosen members shall be 

7 three years, except that the members first chosen shall choose by lot 



1917.] HOUSE — No. 1S50. 171 

8 three of their number to go out of office at the end of one year and 

9 three at the end of two years. The board shall elect its own chairman 

10 and other officers. Its members shall be paid necessarj' expenses, but 

11 no salaries. 

Powers of Medical Advisory Board. 

1 Section 17. All regulations of the commission relating to phy- 

2 sicians and to medical benefits shall be referred to the medical advisory 

3 board and shall not be approved by the commission until after the 

4 first regular meeting of the board after such reference, unless sooner 

5 acted upon by the board, except in case of an emergency, when the 

6 commission may issue a temporal regulation for a period of not over 

7 six months. The medical advisorj^ board shall make recommendations 

8 to the commission on standards for the hospitals and dispensaries 

9 which provide service under the act; for admission to practice under 

10 the act as specialists; and for obstetrical care. Such recommendations 

11 of the medical advisory board shall be effective on approval by the 

12 commission. 

Meetings of the Medical Advisory Board. 

1 Section 18. The board shall meet at least once every three months 

2 and may be called together at any time on one week's notice by the 

3 chairman or by a call signed by any five members or by the commis- 

4 sion. A majority of the members of the board shall constitute a 

5 quorum. 

Settlement of Disputes. 

1 Section 19. All disputes arising under the act shall be determined 

2 by the commission either on appeal or, in case of disputes between 

3 funds and societies, by original proceedings. The commission may 

4 assign any dispute except disputes in regard to medical benefit, for 

5 hearing and determination to a dispute committee composed of one 

6 employer and one employee member of the council, and a member of 

7 the commission, as chairman, the members of the council to serve in 

8 turn on the dispute committee for periods of one month. Either party 

9 may appeal to the commission from the decision of the dispute com- 
10 mittee within thirty days from the date of rendering the decision. 



Medical Disputes. 

1 Section 20. All disputes regarding medical benefit, which have 

2 been appealed to the commission, shall be referred by the commission 

3 to the medical advisory board, which shall report to the commission, 

4 and the commission shall not decide any such dispute until after a 

5 report has been made by the board. 



172 SOCIAL INSURANCE. [Feb. 



Nursds' Advisory Board. 

1 Section 21. The state nurses' association shall choose a nurses' 

2 advisory board of seven members, which shall be advisory to the com- 

3 mission on all matters relating to nursing service. 

Suits at Law. 

1 Section 22. Suits shall not be brought in any court on any matter 

2 on which an appeal is allowed to the commission until after a decision 

3 by the commission, or of a dispute committee and the statutes of 

4 limitations shall not begin to run in such cases until after the decision 

5 is filed. 

Part VJ. 

MISCELLANEOUS PROVISIONS. 

Limitations of Claims. 

1 Section 1. No claim for benefit shall be valid unless made to the 

2 board of directors of the proper fund or society within one year from 

3 the time when the benefit was due. 

Disclosure prohibited. 

1 Section 2. Information acquired by the commission or a fund, or 

2 any of their officers or employees, from employers or employees pur- 

3 suant to this act, shall not be opened to public inspection, and any 

4 such officer or employee who, without authority of the commission or 

5 pursuant to its rules, or as otherwise acquired by law, shall disclose 

6 the same shall be guilty of a misdemeanor. 

Unauthorized Deductions from Wages prohibited. 

1 Section 3. An employer shall not deduct from the wages or salary 

2 of an employee any part of any contribution required to be borne by 

3 the employer, or make any agreement with the employee for the re- 

4 payment of any part of such contribution. Any employer who violates 

5 this section is guilty of a misdemeanor and upon conviction shall be 

6 punished by a fine of not more than ten dollars. Every deduction or 

7 repayment in the case of each employee shall constitute a separate 

8 violation. 

Penalties. 

1 Section 4. Any person who: (1) prevents or obstructs the audit 

2 of a pay roll, as authorized by this act; (2) knowingly makes any false 

3 statement or false representation for the purpose of obtaining any 

4 benefit or payment under this act, either for himself or any other 



1917.] HOUSE — No. 1850. 173 

5 person; or (3) wilfully violates or fails to comply with this act or aiw 

6 regulation or order made by the commission, is guilty of a misde- 

7 meanor. 

Technical Rules of Evidence or Procedure not re quired. 

1 Section 5. The commission or a deputy commissioner or dispute 

2 committee, in making an investigation or inquiry or conducting a 

3 hearing, shall not be bound by common law or statutory rules of evi- 

4 dence or by technical or formal rules of procedure, except as provided 

5 by this act, but may make such investigation or inquiry or conduct 

6 such hearing in such manner as to ascertain the substantial rights of 

7 the parties. 

When to take Effect. 

1 Section 6. This act shall take effect immediately, except that the 

2 provisions as to the payment of contributions shall not take effect until 

3 April first, nineteen hundred and eighteen, and the first payment of 

4 contributions bj' the commonwealth shall not be made until June 

5 thirtieth, nineteen hundred and eighteen; the provisions as to the 

6 benefits shall not take effect until July thirty-first, nineteen hundred 

7 and eighteen: provided, that if a fund or society is authorized after 

8 January first, nineteen hundred and eighteen, the provisions as to the 

9 benefits shall not take effect until three months after authorization. 



174 SOCIAL INSURANCE. [Feb. 



REPORT ON HEALTH INSURANCE PROVISIONS AMONG 
LABOR UNIONS AND FRATERNAL ORGANIZATIONS IN 
MASSACHUSETTS. 1 

I. Number of Laborers with Sickness Insurance. 

Of the 1,425 labor unions, comprising all the locals in the State, 399 sent 
in replies. Of these, 32.3 per cent. (129) pay some sort of sick benefit. 
Similar figures for 1908 show that 28.5 per cent, of the unions which re- 
plied paid a sick benefit. 2 This shows an increase in eight years of 102 
unions paying a benefit (if the figures of those replying to the inquiry are 
assumed to be representative of all the unions), while the total number of 
local unions was only increased by 169. 

It is estimated that 80,083 3 workmen are thus insured through labor 
unions, this being 5.3 per cent, of the number of persons eighteen years or 
over gainfully employed in Massachusetts, receiving annually less than 
$1,200. 4 Possibly this percentage is not accurate because of the fact that, 
in general, the larger unions are more likely to be the ones which have a 
system of health insurance. 

The amount of sickness benefit paid is quite variable, ranging from $7 
per week paid for sixteen weeks in any twelve months to $3 per week 
for six weeks. The average benefit paid is $4.30 for 14.5 weeks. 6 This 
is much less than that proposed in the standard bill, which would be ap- 
proximately $7.23 a week 6 for twenty-six weeks. In a good many trades 
the sick benefit is paid by the international union through the locals. 
This results in a uniformity of benefit for a given trade. Some of the 
trades which seem to have the most developed system of benefits are 
bakers, barbers, boot and shoe workers and plumbers. Other trades ap- 
parently have no locals giving benefits. Among these are brewery workers, 
musicians, painters and decorators, textile workers and theatrical em- 
ployees. There does not seem to be any relation between the average 
wage for a trade and the payment of benefits. Plumbers are highly paid 
while barbers have a relatively low wage scale. 

To the questions sent to the 314 fraternal organizations 113 replies 
were received. Of these 113 societies, 64.6 per cent. (73) paid a sickness 
benefit. The amount paid and the period of payment seemed to be very 
similar to that of labor unions. It is impossible to estimate the number 

1 Based on replies to a questionnaire sent out to 1,425 labor unions and 314 fraternal organiza- 
tions by the Special Commission on Social Insurance. 

2 This was a reply from 937 out of 1,256 local unions to which the Bureau of Statistics sent in- 
quiries. 

3 Thirty-three per cent, of 242,677, — an estimate of the membership of labor unions in 1916 
based on the figures for 1913 and 1914. 

4 This was estimated at 1,507,373 by the Bureau of Statistics. 

5 These averages are computed with such unions as units. To be correct they should be 
computed on the basis of membership (i.e., giving more weight to the larger unions). 

6 Estimated on the basis of $564 average yearly wage of union members (Bureau of Statistics), 
i.e., $10.85 per week, and a benefit of 66^ per cent, of wages. 



1917.] HOUSE — No. 1850. 175 

of laborers who receive a sickness benefit in this way. It is a larger pro- 
portion of the organizations of this character than of the labor unions, 
but probably not a larger proportion of the total number of laborers in 
the State. 

From a very hasty perusal of the answers to questions sent to the manu- 
facturers in representative cities, it seemed quite evident that very few 
of them provided any sort of insurance for their employees, and that 
where they did, generally less than half took advantage of it. 

There are several conclusions which may be drawn from this investi- 
gation of the number of laborers at present coming under some health 
insurance system. In the first place, the systems in use are far from uni- 
form, and cover only a small proportion of the laboring population. Sec- 
ondly, the systems are prone to overlap one another. Also the particular 
disadvantage of the payment of sick benefits by labor unions to their 
members lies in the fact that if a man ceases to be a member, through 
removal or expulsion or any other cause, he loses the benefit of his past 
contributions, even though he may have been a member for a considerable 
time and paid the dues, which are necessarily high in a union which pays 
benefits to its sick members. 



II. Number of Laborers with Death Benefit. 

The payment of a death benefit was found to be much more prevalent, 
there being almost twice as many unions paying this as there were paying 
a sickness benefit. Of the 399 unions replying, 61.9 per cent. (247) pay 
a death benefit. This amount varies in different trades and between 
different unions in the same trade. It is generally also variable according 
to the length of time a man has been a member of the union. Usually 
this reaches a maximum after five years of membership. For the 247 
unions this maximum averaged $284.80. 



III. Economic Cost of Sickness in Massachusetts. 

Of the 129 unions reporting a sick benefit, 95 gave answers to the ques- 
tions with reference to the amount of sickness for which benefits were 
paid during the past year. From these answers it was found that there 
was an average per annum of 13.3 cases of sickness per 100 persons 
insured, with an average loss of 23.6 days per case, or 3.1 days per per- 
son annually insured. Considering sickness to be equally prevalent 
among other laborers, this would give a total of 4,672,856.3 days lost 
by the employed workers in the State. Considering the average wage 
of these workers as $564, the total loss in wages by their sickness would 
be $7,209,549.72 per year. To complete the estimate of the economic loss 
to the State, it would be necessary to give the cost for medical service, etc. 

Before doing this I wish to comment on the figures given above, i.e., the 
report which gives 13.3 cases of sickness per 100 persons, with a loss of 



176 SOCIAL INSURANCE. [Feb. 

23.6 days per case, or 3.1 per insured person. These figures are quite 
different from the data of similar character which Rubinow x gives from 
Austria and Germany. For Austria the figures are 53 cases per 100 
persons insured, with seventeen days per case or ten days per person. In 
Germany it is 40 cases per 100, with twenty days per case, or eight days 
per person. It is hard to find the exact explanation of this discrepancy. 
It may lie largely in the fact that the benefit is paid only in the more 
serious cases of sickness. The truth of this assumption is borne out by 
the fact that the average number of days per case is larger than either 
that of Germany or Austria. 

Another fact which would help to explain the situation is that it is the 
more enterprising men who take advantage of the opportunity offered 
by the unions of Massachusetts, and therefore the ones who are more 
likely to be careful in regard to their health. Under the compulsory 
system all laborers are insured, and this includes, of necessity, many who 
are careless about their health, and who are really the ones to benefit 
most from the insurance. 

The figures of the Massachusetts labor unions are, therefore, not as 
valuable in determining the cost of sickness as are approximations made 
from Germany's figures. I shall follow the method of Mr. Rubinow. 1 

Number of persons eighteen years and over gainfully employed and 

receiving less than $1,200 annually, ..... 1,507,373 

Estimated number of days lost at- 8.5 per person, . . . 12,812,670.5 

Estimated loss in wages at $1.80 per day for six-sevenths of the days, $19,468,122. 40 

Medical cost at $1 per day, 12,812,670.50 

Economic loss at 50 cents per day, . . . . . . 6,489,374. 10 



Total social and economic cost of sickness per annum among 

employees in Massachusetts . $38,770,167.00 

The above is an average of $25.70 per employee. 

Respectfuhy submitted, 

PAUL H. MEANS. 

1 I. M. Rubinow: Social Insurance (Chapter XIII.), Henry Hall & Co., 1913, p. 214. 



1917. 



HOUSE — No. 1850. 



177 



REPORT ON ACCIDENT INSURANCE IN MASSACHUSETTS 
DURING THE YEAR 1915. 1 



Population of Massachusetts in 1915, 

Estimated number of employees over eighteen years receiving less 

than $1,200 a year, 

Total number of unions in Massachusetts in 1915, 
Total number of workers in these unions in 1915, 
Computed per cent, of unions carrying accident insurance, 

Average monthly contribution for accident insurance, . 
Average weekly payment upon disability, . 

Average waiting period (days), ..... 
Average (weeks), ....... 



3,600,000 

1,507,373 

1,425 

243,535 

2 32 

$1.12 

4.00 

7.42 
14 



Note. — Strike insurance was found in 40 per cent, of the unions paying $7 weekly. 



Deductions : — 
Computed number of unions carrying accident insurance, 
Computed number of members, ..... 

Computed number of unions not carrying accident insurance, 
Computed number of members, ..... 

Computed per cent, of accidents among union members, . 
Computed number of accidents per 1,000 population, . 
Computed average number of days of disablement per person, 

Computed average wage in Massachusetts in 1914, 

Note. — In 1914, $341,309,517 were paid to 606,698 workers. 

Computed economic cost to organized labor, 

Computed total economic loss in the State due to accidents, 



456 

77,931 

969 

156,604 

3 

1.25 

27 

$564 



$296,664 
$1,779,984 



Accident insurance was found in 32 per cent, of the labor unions heard 
from, and of this about 3 per cent, was regular life insurance. Weekly 
contributions ranged from 50 cents to $2 a month, and weekly payments 
for accidents ranged from $3.50 to $7 a week for nine to twenty weeks 
in a year. 

Since it is reasonable to imagine that unorganized labor has very little 
accident insurance, and since we have found only 32 per cent, having 
accident insurance among organized labor, it is fair to hazard the state- 
ment that only 5 to 15 per cent, of the working population of Massa- 

77 931 

chusetts carry insurance against accident = 5 per cent, approxi- 

1,507,373 

mately. One out of every 33 workers (3 per cent.) is found to suffer from 

accident for an average of twenty-seven days for each injured person 

every year, losing a total of 1,180,980 days (3,281 years), representing 

a loss in wages (rate $564 a year) of $1,779,984.00 a year. 

Respectfully submitted, 

A. E. O. MUNSELL. 



1 Based on figures obtained in 399 replies from 1,425 labor unions. 2 In 1908, 20.5 per cent. 



178 SOCIAL INSURANCE. [Feb. 



REPORT OF INVESTIGATIONS MADE BY DR. W. W. WALCOTT 
ON HEALTH INSURANCE. 

Report on Fraternal Orders. 

In beginning the work on this Commission the first problem was to 
determine if possible how the insurance situation is being handled under 
existing conditions. The facts were obtained from the records and reports 
of the Bureau of Statistics, the State Commissioner of Insurance, the 
State Librarian, the State Board of Charity, the library of the Massa- 
chusetts General Hospital, the Boston Medical Library and the Associated 
Charities. 

From these sources it was first necessary to sort out the companies 
doing business in Massachusetts from other companies, and to sort out 
the Massachusetts policy holders from Companies chartered from other 
States but doing business in Massachusetts. As far as ordinary insurance 
companies are concerned, it was comparatively simple to obtain records 
of receipts, expenditures, death and sick benefits, etc., as practically all 
of these companies are required by law to file detailed reports with the 
Commissioner of Insurance. 

When we came to fraternal orders the problem was somewhat different. 
While every corporation wishing to apply for a charter to do any kind of 
insurance business — health, life or accident — must apply to the State 
Commissioner of Insurance, presenting sample policy, a large number are 
incorporated under exemption of section 12, chapter 119, Revised Laws. 
This means that the company so exempted does not have to file a report 
with the Insurance Commissioner, and the Insurance Commissioner does 
not know when they cease to do business and has no way of finding out. 

There are 116 fraternal orders not incorporated under the exemption 
act with accessible tables giving the following information : — 

Date of incorporation. 

Location. 

Name of president and secretary. 

Income : — 

(a) Death and disability assessments. 

(b) All other sources. 
Disbursements : — 

(a) Death and disability claims. 

(6) All other. 
Membership and death claims. 
Admitted assets. 
Death claims. 
Disability claims. 
Borrowed money. 

There was certain additional information that it seemed desirable to 
have, and a circular letter was sent out to each of the fraternal orders 
in question. 



1917.1 



HOUSE — No. 1850. 



179 



To the questions sent to the 314 fraternal organizations 113 replies 
were received. Of these 113 societies 64.6 per cent. (73) paid a sickness 
benefit. The amount paid and the period of payment seemed to be very 
similar to that of labor unions. It is impossible to estimate the number 
of laborers who receive a sickness benefit in this way. It is a larger pro- 
portion of the organizations of this character than of the labor unions, 
but probably not a larger proportion of the total number of laborers of 
the State. 

While the volume of business done by insurance companies above 
mentioned, and these fraternal orders that are not exempted under the 
exemption act from filing reports with the Insurance Commissioner, rep- 
resents a large percentage of the insurance business of this type, it does 
not by any means represent the majority of policy holders. A great 
many people, whose number it is impossible to estimate, are carrying, or 
have carried, for varying lengths of time, policies in companies or mutual 
benefit associations incorporated under the exemption act. This means 
that there was no way of getting records concerning them. 

The following table shows the exact condition of affairs as far as the 
exemption act is concerned: — ■ 





Number 

applying for 

a Charter. 


Number 

incorporated 

under the 

Exemption 

Act. 


Insurance corporations authorized during 1910 

Insurance corporations authorized during 1911 

Insurance corporations authorized during 1912, .... 
Insurance corporations authorized during 1913, .... 
Insurance corporations authorized during 1914, .... 


36 

47 
35 
48 
51 


30 
46 
34 
45 

48 


Totals, 


217 


203 



That means that for a five-year period 217 insurance companies doing 
health, life, death or accident benefit insurance applied for a charter from 
the Insurance Commissioner, and that 203 of them were incorporated 
under the exemption act. Obviously, no records of the latter are on file, 
and it is impossible to obtain satisfactory data regarding them. 

These companies are composed chiefly of mutual benefit associations 
among the foreign-born population, often having a very small member- 
ship, with officers changing at least every year and addresses changing 
oftener. A study of these societies among Italians alone furnished a list 
of 127, concerning which, however, little information could be obtained. 
Many of the societies have died after existing a comparatively short 
time; others have moved and changed their headquarters; officers have 
changed, moved or died, and, in short, while considerable time was spent 



180 



SOCIAL INSURANCE. 



[Feb. 



in securing a list of the Italian societies alone, the list was not of any- 
practical use in getting information as to how this class of people was 
being insured, except in a very general way. 

Up to date (Sept. 1, 1916), from the facts at hand it would seem that 
while a large number of people are being insured under existing condi- 
tions, there are no available records kept to determine either the number 
of people or the manner of their insurance. 

While this study dealt only with the Italian societies, it is fair to as- 
sume that similar conditions exist among companies or societies with a 
membership of other racial origins. The study of the Italian situation 
revealed the futility of attempting to follow up this investigation among 
other societies. 

The following tables give certain essential facts concerning fraternal 
orders and the insurance companies in Massachusetts, as well as those 
companies chartered outside this State but doing business here. 

In the work the figures for 1914 had to be used, as the 1915 figures were 
not available. 



Fraternal Benefit Societies. 
Table No. 1. 



Name. 


Incorporated. 


1 

Location. 


Massachusetts (Lodge System). 
American Benefit Society, 


Jan. 


9, 


1893 


Boston. 


Degree of Honor of the A. 0. U. W. of Massachusetts, 

Inc. 
Foresters, Massachusetts Catholic Order of , . 


May 


25, 


1905 


Boston. 


July 


30, 


1879 


Boston. 


Fraternal Helpers, American Order of, . 


July 


13, 


1892 


Boston. 


Golden Star (Inc.), United Order of the, 


Apr. 


17, 


1900 


Haverhill. 


Harugari, Gross-Loge des Deutschen Ordens der, . 


Apr. 


17, 


1881 


Boston. 


Home Benefit Association, The, 


June 


23, 


1893 


Boston. 


Independent Workmen's Circle of America, Inc., . 


Dec. 


8, 


1908 


Boston. 


Labor League, Inc., 


July 


12, 


1910 


Boston. 


Loyal Knights and Ladies 


June 


18, 


1895 


Boston. 


New England Order of Protection, 


Nov. 


12, 


1887 


Boston. 


Pilgrim Fathers, United Order of the, .... 


Mar. 


15, 


1879 


Lawrence. 


Portuguese Fraternity of the United States of America, 


Jan. 


5, 


1899 


Somerville. 


Royal Arcanum, 


Nov. 


5, 


1877 


Boston. 


Royal Michaelense Autonomic Beneficent Association, 

Inc. 
Scottish Clans (Inc.), American Order of, 


Aug. 


10, 


1899 


New Bedford. 


May 


6, 


1889 


Boston. 


Sons of Israel, Independent Order 


May 


26, 


1914 


Boston. 


Union Fraternal League, 


June 


19, 


1889 


Boston. 


United Workmen, Grand Lodge of Massachusetts, 


Feb. 


9, 


1883 


Boston. 



1917 



HOUSE — No. 1850. 



181 



Table No. 1 — Continued. 



Name. 



Incorporated. 



Location. 



Massachusetts (Miscellaneous). 
American Express Employees Aid Society, 

Arlington Police Relief Association, Inc., 

Boston Chamber of Commerce, Gratuity Fund, . 

Boston Firemen's Mutual Relief Association, . 

Boston Fruit and Produce Exchange Beneficiary Asso- 
ciation. 
Boston Letter Carriers Mutual Benefit Association, 

Boston Post Office Clerks Mutual Benefit Association, . 

Boston Teachers Mutual Benefit Association, 

Brockton Firemen's Relief Association, 

Brockton Masonic Benefit Association, 

Brookline Firemen's Relief Association, 

Brookline Police Mutual Aid Association 

Brotherhood of Israel, Inc., 

Cambridge Police Mutual Aid Association, 

Catholic Association, Corporation of the Members of the 

Chelsea Police Relief Association, 

Commercial Travellers Boston Benefit Association, Inc., 

Commercial Travellers Eastern Accident Association, . 

Fall River Fireman's Mutual Relief Association, . 

Haverhill Fireman's Relief Association, .... 

Hermann's Benefit Association, Inc 

Hibernian's Widows' and Orphans' Fund, 

Knights of St. Stanislaus, Inc., 

Lawrence Fire Department, Mutual Relief Association 

of the. 
Lawrence Perchers Relief Association, Inc 

Lawrence Police Relief Association, .... 

Lawrence Woolsorters Benefit Association, Inc., 

LaLigue des Patriotes, 

Lowell Firemen's Fund Association, .... 

Lowell Police Relief Association, 

Lynn Fire Department, Relief Association of the, 

Madeiran Alliance Protective Association, The, 

Marketmen's Relief Association, 

Masonic Casualty Company, 

Michaelense Mutual Aid Society, Inc., .... 

Monte Pio Luso- Americano Corp., 

New Bedford Firemen's Mutual Aid Society, 



Mar. 

Sept. 

May 

Feb. 

Nov. 

May 

July 

Sept. 

Nov. 

Jan. 

May 

Nov. 

June 

May 

Mar. 

Mar. 

Mar. 

Sept. 

June 

Jan. 

Dec. 

Dec. 

July 

Mar. 

Dec. 

Apr. 

June 

Mar. 

Nov. 

Apr. 

Mar. 

Oct. 

July 

Oct. 

Apr. 

May 

Sept. 



14, 1898 

1, 1905 

22, 1885 
18, 1882 

1, 1888 

18, 1889 

19, 1894 

20, 1890 
7, 1887 

3, 1894 

23, 1887 

4, 1887 

10, 1913 
20, 1884 
14, 1891 

19, 1889 
7, 1901 

20, 1894 
14, 1892 
25, 1887 
20, 1901 

4, 1890 

30, 1902 
18, 1878 
18, 1902 

11, 1889 
11, 1901 

31, 1888 
22, 1887 

5, 1889 
25, 1886 
10, 1913 
10, 1912 

7, 1895 

27, 1910 

7, 1885 

25, 1895 



Boston. 

Arlington. 

Boston. 

Boston. 

Boston. 

Boston. 

Boston. 

Boston. 

Brockton. 

Brockton. 

Brookline. 

Brookline. 

Boston. 

Cambridge. 

Lowell. 

Chelsea. 

Boston. 

Boston. 

Fall River. 

Haverhill. 

Adams. 

Marlborough. 

Chicopee. 

Lawrence. 

Lawrence. 

Lawrence. 

Lawrence. 

Fall River. 

Lowell. 

Lowell. 

Lynn. 

Lowell. 

Boston. 

Boston. 

New Bedford. 

New Bedford. 

New Bedford. 



182 



SOCIAL INSURANCE. 



[Feb. 



Table No. 1 — Continued. 



Name. 


Incorporated. 


1 
Location. 


Massachusetts (Miscellaneous) — Con. 
New Bedford Police Association, 


Nov. 


20, 


1890 


New Bedford. 


Newton Police Benefit Association, .... 


Jan. 


31, 


1907 


West Newton. 


New York, New Haven & Hartford Railroad Beneficial 
Association. 

Odd Fellows Beneficial Corporation of Southern Massa- 
chusetts. 1 

Odd Fellows Death Benefit Association, Brockton, 


July 
Mar. 
Nov. 


24, 
27, 
17, 


1882 
1900 
1892 


Boston. 
New Bedford. 
Brockton. 


Portuguese Azorian Operative Beneficent Association, . 


Sept. 


8, 


1911 


Fall River. 


Portuguese Beneficent Association of St. Michael the 

Archangel, Inc. 
Portuguese Beneficent Association of St. Peter, Inc., 


Jan. 
Oct. 


22, 
23, 


1903 
1908 


Fall River. 
Rehoboth. 


Portuguese Benefit Society of Our Lady of Help, of 

Peabody, Inc. 
Portuguese Benevolent Society of St. Anthony, 


May 
Oct. 


9, 

15, 


1910 
1896 


Peabody. 
Lowell. 


Progressive Max Levy Society of New Bedford, Inc., 


Aug. 


13, 


1910 


New Bedford. 


Quincy Firemen's Relief Association, .... 


May 


21, 


1886 


Quincy. 


Red Men's Fraternal Accident Association of America, > 


Aug. 


4, 


1887 


Westfield. 


Revere Police Relief Association, 


Sept. 


14, 


1907 


Revere. 


Salem Police Relief Association, . . . . . 


Sept. 


28, 


1895 


Salem. 


Somerville Firemen's Relief Association, 


Mar. 


21, 


1890 


Somerville. 


Somerville Police Relief Association, .... 


Jan. 


24, 


1882 


Somerville. 


Sons of Freedom, Inc., 2 


Dec. 


2, 


1895 


Boston. 


Southern Massachusetts Masonic Mutual Relief Asso- 
ciation. 
Springfield Police Relief Association, .... 


Dec. 
Feb. 


4, 

17, 


1882 
1893 


Taunton. 
Springfield. 


Stars of Jacob, ' 


Nov. 


20, 


1912 


Worcester. 


St. Antonio, Society of, 


July 


31, 


1891 


Taunton. 


St. Casimir, Society of, 


Dec. 


19, 


1896 


Worcester. 


St. Francis Benefit Association, 


Sept. 


8, 


1896 


Worcester. 


St. John the Baptist, National Benevolent Union of, 


Oct. 


15, 


1891 


Haverhill. 


St. John the Baptist Benevolent Society of Lowell, 


Jan. 


19, 


1870 


Lowell. 


St. Jean Baptiste Society of Marlborough, 


May 


24, 


1883 


Marlborough. 


St. Jean Baptiste Society of North Adams, . 


Oct. 


22, 


1894 


North Adams. 


St. John the Baptist Mutual Benefit Association of 

Salem. 
St. John the Baptist, Society of 


Jan. 


15, 


1897 


Salem. 


Sept. 


12, 


1891 


Webster. 


St. Jean Baptiste de Worcester, Massachusetts, Soci6t6 

de Bienfaisance. 4 
St. Joseph's Benevolent, Protective and Charitable 

Society. 5 


Jan. 

Apr. 


10, 
8, 


1877 
1891 


Worcester. 
Fall River. 



1 Reincorporated Jan. 1, 1915, as a stock accident company. 

2 No report. Receiver appointed Oct. 20, 1914. 

3 No business transacted for one year. Charter voided June 5, 1915. 

4 Becomes exempt June 1, 1915, under section 2%, chapter 628, Acts of 1911. 

5 Subject to section 29a, chapter 628, Acts of 1911, since Jan. 1, 1914. 



1917.] 



HOUSE — No. 1850. 



183 



Table No. 1 — Concluded. 



Name. 


Incorporated. 


Location. 


Massachusetts {Miscellaneous) — Con. 
St. Joseph Polish Society, Inc. 


July 


8, 


1902 


Thorndike. 


Teachers Annuity Guild, ...... 


Apr. 


21, 


1893 


Somerville. 


United Hebrews of America (Inc.) Order, 


Sept. 


9, 


1904 


Boston. 


United Masonic Health and Accident Association Inc., 


Aug. 


23, 


1907 


Springfield. 


Wellesley Firemen's Relief Association, .... 


Feb. 


5, 


1914 


Wellesley. 


Winchester Firemen's Relief Association, 


Jan. 


7, 


1889 


Winchester. 


Worcester Firemen's Relief Association, .... 


July 


27, 


1878 


Worcester. 


Worcester Police Relief Association, .... 


Jan. 


23, 


1889 


Worcester. 


Other States (Lodge System). 
Artisans Canadiens-Francais, La Soci^tg des, 


Dec. 


28, 


1876 


Montreal, Can. 


Brith Abraham, Independent Order, .... 


Aug. 


2, 


1894 


New York, N. Y. 


Brith Abraham, United States Grand Lodge, 


Feb. 


3, 


1900 


New York, N. Y. 


Catholic Benevolent Legion, 1 


Sept. 


5, 


1881 


Brooklyn, N. Y. 


Catholic Knights of America, 


Apr. 


1, 


1880 


St. Louis, Mo. 


Catholic Mutual Benefit Association, .... 


June 


9, 


1879 


Hornell, N. Y. 


Foresters, Catholic Order of, 


May 


24, 


1883 


Chicago, 111. 


Foresters of America, Endowment Fund, 


- 




- 


Jersey City, N. J. 


Golden Cross of the World, United Order of the, . 


July 


4, 


1876 


Knoxville, Tenn. 


Heptasophs, Supreme Conclave Improved Order, . 


Aug. 


28, 


1878 


Baltimore, Md. 


Knights and Ladies of Honor, 


Apr. 


1, 


1878 


Indianapolis, Ind. 


Knights of Columbus, . . . . ' . . . 


Mar. 


29, 


1882 


New Haven, Conn. 


Knights of Honor, 


Mar. 


20, 


1876 


St. Louis, Mo. 


Knights of Pythias Insurance Department, . 


Aug. 


5, 


1870 


Indianapolis, Ind. 


Ladies Catholic Benevolent Association, 


June 


28, 


1890 


Erie, Pa. 


Loyal Association, 


Jan. 


is, 


1890 


Jersey City, N. J. 


Scottish Clans Order of Missouri, 


July 


5, 


1881 


Boston, Mass. 


Sons of Benjamin Independent Order, .... 


Sept. 


13, 


1880 


New York, N. Y. 


St. Jean Baptiste de Amgrique L' Union, . . 


May 


7, 


1900 


Woonsocket, R. I. 


Workmen's Sick and Death Benefit Fund, 


Feb. 


13, 


1899 


New York, N. Y. 



1 Withdrew from Massachusetts March 12, 1915. 



184 



SOCIAL INSURANCE. 



[Feb. 



Table No. 2. 





Income. 


Disbursements. 


Mem- 
bership 
Dec. 31, 

1914. 


NAME. 


Death 

and 

Disability 

As- 
sessments. 


All Other 
Sources. 


Death 

and 

Disability 

Claims. 


All 
Other. 


Massachusetts (Lodge System). 
American Benefit Society, 


$68,726 


$13,708 


$68,950 


$11,313 


6,674 


Degree of Honor of the A. 0. U. W. of 

Massachusetts, Inc. 
Foresters, Massachusetts Catholic Order 

of.i 
Fraternal Helpers, American Order of, 


10,476 
511,248 


3,074 
57,645 


5,800 
444,385 


2,168 
25,551 


1,677 
39,856 


6,973 


2,431 


4,122 


2,307 


396 


Golden Star (Inc.), United Order of the, 


21,061 


1,666 


22,750 


906 


888 


Harugari, Gross -Loge des Deutschen 

Ordens der. 
Home Benefit Association, l . 


26,571 
92,260 


2,931 

28,568 


32,500 
75,500 


1,060 
24,112 


2,033 
5,514 


Independent Workmen's Circle of 

America, Inc. 
Labor League, Inc., .... 


15,024 


10,070 


12,259 


9,444 


2,423 


9,132 


5,305 


8,758 


4,808 


1,939 


Loyal Knights and Ladies, . 


3,962 


443 


4,000 


569 


192 


New England Order of Protection, 1 


1,063,183 


68,562 


1,105,308 


60,649 


51,717 


Pilgrim Fathers, United Order of the, 1 


406,355 


21,983 


421,100 


22,641 


10,107 


Portuguese Fraternity of the United 

States of America. l 
Royal Arcanum, 1 


63,022 
8,600,592 


4,812 
667,122 


62,096 
8,766,013 


4,102 

309,162 


5,002 
245,986 


Royal Michaelense Autonomic Benef- 
icent Association, Inc. 1 

Scottish Clans (Inc.), American Order 
of. 

Sons of Israel, Independent Order, 


42,508 
3,834 


4,936 
575 


41,644 
2,625 


4,992 
354 


4,571 
343 


904 


629 


295 


550 


2,362 


Union Fraternal League, 


31,509 


12,681 


20,419 


12,768 


2,095 


United Workmen, Grand Lodge of Mas- 
sachusetts. l 


1,178,832 


43,944 


926,000 


37,693 


25,706 


Totals, 


$12,156,172 


$951,085 


$12,024,554 


$535,199 


409,481 


Massachusetts (Miscellaneous ) . 

American Express Employees Aid Soci- 
ety. 

Arlington Police Relief Association, 
Inc. 

Boston Chamber of Commerce, Gratu- 
ity Fund. 

Boston Firemen's Mutual Relief Asso- 
ciation. 

Boston Fruit and Produce Exchange 
Beneficiary Association. 

Boston Letter Carriers Mutual Benefit 
Association. 

Boston Post Office Clerks Mutual Bene- 
fit Association. 

Boston Teachers Mutual Benefit Asso- 
ciation. 

Brockton Firemen's Relief Association, 


$14,993 


$426 


$8,468 


$725 


1,161 


- 


101 


38 


13 


12 


47,052 


6,807 


62,500 


355 


887 


42,470 
10,700 
11,845 
14,222 
6,099 


863 

603 

16,236 

11,095 

7,814 

1,768 


44,000 
9,960 
16,484 
13,430 
12,683 
863 


401 

381 
1,696 

917 
1,108 

264 


1,326 

487 

1,193 

1,212 

755 

96 


Brockton Masonic Benefit Association, 


3,167 


105 


3,176 


90 


347 


Brookline Firemen's Relief Association, 


- 


1,343 


689 


498 


108 


Brookline Police Mutual Aid Associa- 
tion. 


- 


1,241 


247 


255 


72 



See detailed statement. 



1917.1 



HOUSE — No. 1850. 



185 



Table No. 



Continued. 



1 — — 


Income. 


DlSBUKSEMENTS. 














Mem- 












NAME. 


Death 

and 

Disability 

As- 
sessments. 


All Other 
Sources. 


Death 

and 

Disability 


All 
Other. 


bership 

Dec. 31, 

1914. 






Claims. 






Massachusetts (Miscellaneous) — Con. 












Brotherhood of Israel, Inc., . 


$7,292 


$3,220 


$4,000 


$3,205 


2,331 


Cambridge Police Mutual Aid Associa- 


_ 


6,254 


5,236 


1,097 


157 


tion. 












Catholic Association, Corporation of the 


6,204 


4,397 


2,664 


4,017 


810 


Members of The. 












Chelsea Police Relief Association, 


- 


1,922 


1,795 


94 


41 


Commercial Travellers Boston Benefit 


35,803 


9,440 


34,900 


9,330 


4,417 


Association, Inc. * 












Commercial Travellers Eastern Acci- 


67,644 


19,334 


77,187 


16,114 


8,314 


dent Association. l 












Fall River Firemen's Mutual Relief 


2,190 


835 


2,500 


131 


137 


Association. 












Haverhill Firemen's Relief Association, 


- 


1,341 


723 


180 


99 


Hermann's Benefit Association, Inc., . 


6,367 


926 


1,600 


214 


1,229 


Hibernian's Widows' and Orphans' 


44,944 


4,150 


45,525 


3,862 


2,569 


Fund. 












Knights of St. Stanislaus, Inc., 


636 


1,178 


1,176 


559 


181 


Lawrence Fire Department, Mutual 


_ 


1,154 


453 


235 


159 


Relief Association of the. 












Lawrence Perchers Relief Association, 

Inc. 
Lawrence Police Relief Association, 


72 


714 


424 


103 


179 


- 


2,263 


992 


141 


103 


Lawrence Woolsorters Benefit Associa- 


1,583 


534 


1,033 


198 


402 


tion, Inc. 












La Ligue des Patriotes, . . . 


5,812 


2,267 


5,561 


3,751 


451 


Lowell Firemen's Fund Association, 


- 


3,777 


949 


867 


181 


Lowell Police Relief Association, . 


- 


2,500 


1,371 


302 


95 


Lynn Fire Department, Relief Associa- 
tion of the. 
Madeiran Alliance Protective Associa- 


- 


2,082 


1,741 


982 


253 


2,450 


605 


2,434 


237 


286 


tion, the. 












Marketmen's Relief Association, . 


3,394 


113 


2,428 


944 


747 


Masonic Casualty Company, J 


31,328 


21,916 


31,314 


20,311 


3,425 


Michaelense Mutual Aid Society, Inc., . 


7,483 


2,319 


8,705 


1,174 


635 


Monte Pio Luso-Americano Corp., 


5,535 


4,091 


5,106 


4,204 


387 


New Bedford Firemen's Mutual Aid 

Society. 
New Bedford Police Association, . 


- 


588 


482 


196 


190 


447 


1,958 


400 


368 


112 


Newton Police Benefit Association, 


335 


405 


- 


141 


74 


New York, New Haven & Hartford 


32,045 


1,404 


31,686 


3,993 


994 


Railroad Beneficial Association. 












Odd Fellows Death Benefit Association, 


2,382 


147 


2,423 


129 


294 


Brockton. 












Portuguese Azorian Operative Benefi- 


6,801 


4,996 


6,413 


3,533 


936 


cent Association. 












Portuguese Beneficent Association of 
St. Michael the Archangel, Inc. 


8,112 


4,664 


7,900 


4,442 


1,055 












Portuguese Beneficent Association of 


82 


53 


52 


73 


41 


St. Peter, Inc. 












Portuguese Beneficent Society of Our 


405 


615 


325 


690 


136 


Lady of Help, of Peabody, Inc. 













See detailed statement. 



186 



SOCIAL INSURANCE. 



[Feb, 



Table No. 2 — Continued. 





Income. 


Disbursements. 


Mem- 
bership 
Dec. 31, 

1914. 


NAME. 


Death 

and 

Disability 

As- 
sessments. 


All Other 
Sources. 


Death 

and 

Disability 

Claims. 


All 
Other. 


Massachusetts (Miscellaneous) — Con. 
Portuguese Benevolent Society of St. 

Anthony. 
Progressive Max Levy Society of New 

Bedford, Inc. 
Quincy Firemen's Relief Association, . 


$3,716 


$368 


$3,594 


$358 


304 


944 


428 


626 


362 


188 


373 


946 


1,081 


174 


93 


Red Men's Fraternal Accident Assoica- 

tion of America. * 
Revere Police Relief Association, . 


33,857 


25,747 


29,387 


23,576 


3,698 


- 


464 


222 


4 


22 


Salem Police Relief Association, . 


- 


2,055 


1,320 


98 


59 


Somerville Firemen's Relief Association, 


- 


1,965 


1,076 


119 


92 


Somerville Police Relief Association, . 


- 


3,484 


4,098 


99 


67 


Southern Massachusetts Masonic Mu- 
tual Relief Association. 
Springfield Police Relief Association, . 


466 
70 


401 
2,804 


2,742 
351 


286 
93 


160 
116 


St. Antonio, Society of, ... 


9,095 


1,388 


8,849 


1,298 


621 


St. Casimar, Society of, ... 


- 


1,761 


863 


394 


204 


St. Francis Benefit Association, 


- 


1,913 


678 


855 


244 


St. John the Baptist, National Benevo- 
lent Union of. 

St. John the Baptist Benevolent Society 
of Lowell. 

St. Jean Baptiste Society of Marlbor- 
ough. 

St. Jean Baptiste Society of North 
Adams. 

St. John Baptist Mutual Benefit Asso- 
ciation of Salem. 

St. John Baptist Society of Webster, . 


5,192 


1,507 


6,824 


10,913 


491 


88 


63 


121 


291 


15 


8,971 


3,130 


9,608 


2,520 


563 


5,693 


2,318 


4,526 


1,922 


506 


8,628 
3,773 


2,095 
1,486 


4,583 
4,074 


2,073 
1,041 


579 
323 


St. Jean Baptiste de Worcester, Massa- 
chusetts Societe de Bienfaisance. 

St. Joseph's Benevolent, Protective and 
Charitable Society. 

St. Joseph's Polish Society, Inc., . 


2,094 

6,200 

48 


788 

1,058 

375 


2,264 

6,778 

254 


361 

1,306 

163 


195 
658 
101 


Teachers Annuity Guild, 2 


- 


30,116 


18,012 


910 


1,220 


United Hebrews of America (Inc.) 

Order. 
United Masonic Health and Accident 

Association, Inc. 
Wellesley Firemen's Relief Association, 


5,536 
15,460 


9,036 

17,048 

267 


13,000 

15,705 

42 


8,634 

14,672 

139 


2,974 

2,847 

30 


Winchester Firemen's Relief Associa- 
tion. 
Worcester Firemen's Relief Association, 


; 


189 
4,609 


76 
1,931 


6 
167 


23 
251 


Worcester Police Relief Association, 


2,619 


5,893 


5,028 


409 


229 


Totals, 


$542,717 


$284,266 


$609,749 


$165,763 


55,949 


Other States (.Lodge System). 
Artisans Canadiens-Francais, La Societe 

des. i 
Brith Abraham, Independent Order, * . 


$712,065 


$227,012 


$417,674 


$83,490 


40,095 


706,020 


166,156 


707,850 


95,593 


194,490 



1 See detailed statement. 



2 Annuities. 



1917. 



HOUSE — No. 1850. 



187 



Table No. 2 — Concluded. 



1 


Income. 


Disbursements. 


Mem- 
bership 
Dec. 31, 

1914. 


NAME. 


Death 

and 

Disability 

As- 
sessments. 


All Other 
Sources. 


Death 

and 

Disability 

Claims. 


All 
Other. 


Other States {Lodge System) — Con. 
Brith Abraham, United States Grand 

Lodge. l 
Catholic Knights of America, 1 


$427,944 
527,272 


$99,195 
88,709 


$448,227 
582,348 


$57,007 
28,149 


71,642 
18,220 


Catholic Mutual Benefit Association, l . 


1,399,321 


170,326 


1,667,022 


90,347 


64,079 


Foresters, Catholic Order of, J 


2,204,015 


337,019 


1,548,599 


156,639 


143,914 


Foresters of America, Endowment 
Fund. 

Golden Cross of the World, United 
Order of the. » 

Heptasophs, Supreme Conclave Im- 
proved Order. ' 

Knights and Ladies of Honor, 1 


20,139 

415,626 

1,402,577 

1,404,802 


466 
57,723 
133,709 
157,044 


13,068 

397,519 

1,486,890 

1,461,309 


54,938 
98,915 
123,803 


189 
17,252 
66,887 
65,855 


Knights of Columbus, * . 


1,263,075 


487,740 


758,200 


316,774 


107,479 


Knights of Honor, 1 


1,080,979 


121,857 


1,150,197 


61,530 


15,169 


Knights of Pythias, Insurance Depart- 
ment. l 

Ladies Catholic Benevolent Associa- 
tion. ' 

Loyal Association, * 


2,166,864 
1,338,751 


638,662 
228,217 


1,501,540 
1,206,136 


346,494 
87,820 


71,816 
143,139 


165,741 


20,790 


173,312 


17,137 


6,504 


Scottish Clans Order of Missouri, ' 


169,850 


33,301 


135,800 


20,781 


16,873 


Sons of Benjamin Independent Order, . 


30,819 


25,436 


23,134 


35,253 


742 


St. Jean Baptiste de Amerique L'Un- 


189,824 


94,808 


112,627 


61,797 


26,983 


Workmen's Sick and Death Benefit 
Fund. ' 


522,441 


80,581 


500,182 


31,014 


51,286 


Totals, 


$16,148,125 


$3,168,751 


$14,291,634 


$1,767,481 


1,122,614 



1 See detailed statement. 



188 



SOCIAL INSURANCE. 



[Feb. 



Table No. 



Name. 


Admitted 
Assets. 


Death 
Claims. 


Dis- 
ability 
Claims. 


Lia- 
bilities 
(Bor- 
rowed 
Money). 


Ad- 
vance 

ments. 


Miscel- 
laneous. 


Massachusetts (Lodge System). 
American Benefit Society, 1 

Degree of Honor of the A. 0. U. W. 

of Massachusetts, Inc. 
Foresters, Massachusetts Catholic 

Order of . 1 
Fraternal Helpers, American Order 

of. 
Golden Star (Inc.), United Order of 

the. 
Harugari, Gross-Loge des Deutschen 

Ordens der. 
Home Benefit Association, l 

Independent Workmen's Circle of 

America, Inc. 
Labor League, Inc., .... 

Loyal Knights and Ladies, 

New England Order of Protection, J 

Pilgrim Fathers, United Order of 

the. ! 
Portuguese Fraternity of the United 

States of America. l 
Royal Arcanum, * 

Royal Michaelense Autonomic Be- 
neficent Association, Inc. l 

Scottish Clans (Inc.), American Or- 
der of. 

Sons of Israel, Independent Order, . 

Union Fraternal League, . 

United Workmen, Grand Lodge of 

Massachusetts. 1 


$56,120 

21,849 

782,073 

4,419 

10,297 

27,115 

111,606 

19,051 

7,240 

3,005 

322,437 

12,082 

20,868 

6,501,491 

7,462 

9,670 

688 

43,426 

661,962 


$36,500 

1,500 

40,682 

592 

20,250 

3,000 

2,500 

250 

800 

1,700 

75,500 

160,900 

792,296 

6,500 

200 

2,172 
52,000 


$119 
440 

465 

25 
723 


$250 

2,190 
600 

125 


$15 

235 
147 


$289 

548 

1,328 

48 

1,266 
710 
86 

125 
3,663 

970 
229 


Totals, 

Massachusetts (Miscellaneous). 

American Express Employees Aid 
Society. 

Arlington Police Relief Association, 
Inc. 

Boston Chamber of Commerce, Gra- 
tuity Fund. 

Boston Firemen's Relief Association, 

Boston Fruit and Produce Exchange 
Beneficiary Association. 

Boston Letter Carriers Mutual Bene- 
fit Association. 

Boston Post Office Clerks Mutual 
Benefit Association. 

Boston Teachers Mutual Benefit As- 
sociation. 

Brockton Firemen's Relief Associa- 
tion. 

Brockton Masonic Benefit Associa- 
tion. 

Brookline Firemen's Relief Associa- 
tion. 

Brookline Police Mutual Aid Asso- 
ciation. 

Brotherhood of Israel, Inc., 


$8,622,861 

$11,001 

3,420 

146,690 

4,729 

3,685 

79,371 

17,224 

139,239 

14,331 

555 

17,934 

26,417 

4,630 


$1,197,342 
$500 

8,441 
1,310 

1,000 


$1,772 
$537 

1,626 

455 

1,039 2 

111 


$3,165 
$900 


$397 

$6 
26 


$9,262 
$300 

15 



1 See detailed statement. 



1917.] 



HOUSE — No. 1850. 



189 



Table No. 3 — Continued. 



Name. 


Admitted 
Assets. 


Death 
Claims. 


Dis- 
ability 
Claims. 


Lia- 
bilities 

(Bor- 
rowed 
Money). 


Ad- 
vance 
Assess- 
ments. 


Miscel- 
laneous. 


Massachusetts (Miscellaneous) — Con. 














Cambridge Police Mutual Aid Asso- 


$45,283 


- 


$231 


- 


- 


- 


ciation. 














Catholic Association, Corporation of 


39,510 


- 


- 


$5,000 


- 


- 


the Members of the. 














Chelsea Police Relief Association, . 


9,346 


- 


- 


- 


- 


- 


Commercial Travellers Boston Bene- 


2,571 


$500 


7,254 


_ 


$307 


_ 


fit Association, Inc. ' 














Commercial Travellers Eastern Acci- 


7,853 


20,000 


11,179 


- 


625 


$750 


dent Association. l 














Fall River Firemen's Mutual Relief 


16,396 


- 


- 


- 


- 


- 


Association. 














Haverhill Firemen's Relief Associa- 


11,451 


- 


- 


- 


- 


- 


tion. 














Hermann's Benefit Association, Inc., 


24,610 


200 


- 


- 


- 


- 


Hibernian's Widows' and Orphans' 


6,699 


11,000 


_ 


- 


_ 


_ 


Fund. 














Knights of St. Stanislaus, Inc., 


746 


- 


- 


- 


- 


- 


Lawrence Fire Department, Mutual 


17,099 


_ 


_ 


_ 


_ 


_ 


Relief Association of the. 














Lawrence Perchers Relief Associa- 


2,847 




- 


- 


- 


71 


tion, Inc. 














Lawrence Police Relief Association, 


24,057 


- 


- 


- 


- 


- 


Lawrence Woolsorters Benefit Asso- 


7,023 


_ 


_ 


_ 


_ 


_ 


ciation, Inc. 














La Ligue des Patriotes, . 


2,735 


1,500 


- 


3,500 


- 


- 


Lowell Firemen's Fund Association, 


24,197 


- 


- 


- 


- 


- 


Lowell Police Relief Association, 


16,494 


- 


7 


- 


- 


- 


Lynn Fire Department, Association 

of the. 
Madeiran Alliance Protective Asso- 


23,209 


60 


- 


- 


- 


- 


1,259 


_ 


_ 


_ 


_ 


_ 


ciation, the. 














Marketmen's Relief Association, 


6,989 


- 


- 


- 


- 


- 


Masonic Casualty Company, 1 . 


• 48,897 


300 


4,596 


- 


- 


1,140 


Michaelense Mutual Aid Society, 

Inc. 
Monte Pio Luso-Americano Corp., . 


116 


- 


- 


- 


- 


- 


24,151 


1,548 


130 


10,500 


1,365 


46 


New Bedford Firemen's Mutual Aid 


5,472 


_ 


_ 


_ 


_ 


_ 


Society. 














New Bedford Police Association, 


21,266 


- 


- 


- 


- 


- 


Newton Police Benefit Association, 


8,048 


- 


- 


- 


- 


- 


New York, New Haven & Hartford 


6,761 


4,850 


_ 


_ 


_ 


_ 


Railroad Beneficial Association. 














Odd Fellows Death Benefit Associa- 


913 


_ 


_ 


- 


- 


_ 


tion, Brockton. 














Portuguese Azorian Operative Be- 


8,810 


- 


- 


- 


- 


- 


neficent Association. 














Portuguese Beneficent Association of 


15,230 


- 


- 


- 


- 


- 


St. Michael the Archangel, Inc. 














Portuguese Beneficent Association of 


481 


- 


- 


- 


- 


- 


St. Peter, Inc. 














Portuguese Benefit Society of Our 


2,963 


- 


- 


2,000 


- 


- 


Lady of Help, of Peabody, Inc. 














Portuguese Benevolent Society of 


784 


628 


- 


24 


- 


- 


St. Anthony. 














Progressive Max Levy Society of 


2,050 


- 


- 


- 


- 


- 


New Bedford, Inc. 















See detailed statement. 



190 



SOCIAL INSURANCE. 



[Feb. 



Table No. 3 — Continued. 



Name. 


Admitted 

Assets. 


Death 
Claims. 


Dis- 
ability 
Claims. 


Lia- 
bilities 
(Bor- 
rowed 
Money). 


Ad- 
vance 
Assess- 
ments. 


Miscel- 
laneous. 


Massachusetts (Miscellaneous) — Con. 














Quincy Firemen's Relief Associa- 


$7,603 


- 


- 


- 


- 


- 


tion. 














Red Men's Fraternal Accident Asso- 


44,222 


$700 


$6,190 


- 


$93 


$4,890 


ciation of America. 1 














Revere Police Relief Association, . 


3,016 


- 


- 


- 


- 


- 


Salem Police Relief Association, 


23,623 


- 


- 


- 


- 


- 


Somerville Firemen's Relief Associa- 


15,785 


_ 


_ 


_ 


_ 


_ 


tion. 














Somerville Police Relief Association, 


35,892 


- 


- 


- 


- 


- 


Southern Massachusetts Masonic 


7,828 


161 


_ 


_ 


_ 


_■ 


Mutual Relief Association. 














Springfield Police Relief Association, 


20,354 


- 


45 


- 


- 


• - 


St. Antonio, Society of, . 


633 


600 


- 


- 


- 


- 


St. Casimar, Society of, . 


7,802 


- 


- 


- 


- 


- 


St. Francis Benefit Association, 


3,230 


- 


- 


- 


- 


-" 


St. John the Baptist, National Be- 


40,327 


_ 


355 


$15,000 


_ 


_' 


nevolent Union of.' 














St. John the Baptist Benevolent So- 
ciety of Lowell. 


- 


- 


- 


- 


- 


- 














St. Jean Baptiste Society of Marl- 
borough. 

St. Jean Baptiste Society of North 
Adams. 

St. John the Baptist Mutual Benefit 


29,657 


2,463 


158 


- 


- 


- 


33,881 


- 


- 


- 


- 


- 


24,633 


_ 


_ 


_ 


_ 


_ 


Association of Salem. 














St. John the Baptist Society of Web- 


18,138 


338 


71 


- 


- 


- 


ster. 














St. Jean Baptiste de Worcester, Mas- 


8,190 


293 


- 


- 


- 


- 


sachusetts, Societe deBienfaisance. 














St. Joseph's Benevolent, Protective 
and Charitable Society. 


3,919 


500 


- 


- 


- 


180 














St. Joseph's Polish Society, Inc., 


441 


- 


- 


- 


- 


- 


Teachers Annuity Guild, 


214,932 


- 


8.210 2 


- 


- 


- 


United Hebrews of America (Inc.) 


18,679 


1,000 


_ 


_ 


54 


459 


Order. 














United Masonic Health and Accident 


11,215 


200 


3,235 


- 


979 


- 


Association, Inc. 














Wellesley Firemen's Relief Associa- 


2,091 


- 


- 


- 


- 


- 


tion. 














Winchester Firemen's Relief Associa- 


4,342 


- 


- 


- 


- 


- 


tion. 














Worcester Firemen's Relief Associa- 


29,748 


- 


- 


- 


- 


- 


tion. 














Worcester Police Relief Association, 


61,743 


- 


- 


- 


- 


- 


Totals 


$1,577,472 


$58,092 


$45,429 


$36,924 


$3,455 


$7,851 


Other States (Lodge System).. 














Artisans Canadiens-Francais, La 


$2,641,309 


$27,426 


$4,509 


- 


$3,382 


$2,155,800 


Societe des. 1 














Brith Abraham, Independent Or- 
der. 1 
Brith Abraham, United States 


746,421 


161,750 


2,000 


$8,000 


- 


29,250 


232,183 


104,059 


_ 


7,500 


1,695 


4,386 


Grand Lodge x 














Catholic Knights of America, l 


1,185,387 


19,966 


- 


- 


- 


1,311 


Catholic Mutual Benefit Associa- 


1,918,445 


295,763 


_ 


_ 


_ 


444 


tion. 1 














Foresters, Catholic Order of, x . 


4,644,281 


196,290 


~ 


~ 


- 


867 



See detailed statement. 



2 Includes $3,530 gratuities. 



1917. 



HOUSE — No. 1850. 



191 



Table No. 3 — Concluded. 



Name. 


Admitted 
Assets. 


Death 
Claims. 


Dis- 
ability 
Claims. 


Lia- 
bilities 
(Bor- 
rowed 
Money). 


Ad- 
vance 

Assess- 
ments. 


Miscel- 
laneous. 


Other States {Lodge System) — Con. 

Foresters of America, Endowment 
Fund. 

Colden Cross of the World, United 
Order of the 1 

Heptasophs, Supreme Conclave Im- 
proved Order. 1 

Knights and Ladies of Honor, ' 

Knights of Columbus, 1 . 
Knights of Honor, 1 . 

Knights of Pythias Insurance De- 
partment. 

Ladies Catholic Benevolent Associa- 
tion ! 

Loyal Association, * . 

Scottish Clans Order of Missouri, J . 

Sons of Benjamin Independent Or- 
der. 

St. Jean Baptiste de Amerique 
L'Union. ' 

Workmen's Sick and Death Benefit 
Fund, » 


$18,829 

230,990 

684,136 

627,210 

5,348,293 

531,228 

7,013,691 

3,053,059 

110,500 

252,047 

6,513 

751,784 

832,703 


$77,836 

382,461 

211,340 

117,000 

540,863 

125,786 

79,922 

17,000 

22,400 

969 

9,000 

26,721 


$1,770 
8,625 


$70,000 


$293 
20,477 

1,927 
176 


$1,015 

2,489 

1,352 

5,776 

92 

5,829,740 

125 
108 
197 


Totals, 

Summary. 
Massachusetts (lodge system), . 

Massachusetts (miscellaneous), 

Other States (lodge system \ . 


§30,829,009 

$8,622,861 

1,577,472 

30,829,009 


$2,416,552 

$1,197,342 

58,092 

2,416,552 


$16,904 

$1,772 
45,429 
16,904 


$85,500 

$3,165 
36,924 
85,500 


$27,950 

$397 
3,455 
27,950 


$8,032,952 

$9,262 

7,851 

8,032,952 


Grand totals, .... 


$41,029,342 


$3,671,986 $64,105 


$125,589 


$31,802 


$8,050,065 



See detailed statement. 



192 



SOCIAL INSURANCE. 



[Feb. 



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1917.1 



HOUSE — No. 1850. 



193 



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196 SOCIAL INSURANCE. [Feb. 



Report of Inquiry conducted in the Middle West. 

In October and November of this year certain plants in Chicago, De- 
troit, Flint and Pittsburg, where establishment funds or employees' bene- 
fit associations are maintained, were visited with Dr. B. S. Warren of 
the United States Public Health Service. 

The various plans and types were studied, compared and analyses 
made. 

All had many points in common, and to avoid repetition and needless 
detail four only will be discussed fully, one each in Chicago, Detroit, 
Flint and Pittsburg. 

The essential points of variation in the other funds will then be brought 
out. 

The following summary of the administration of the establishment 
fund and employees' benefit association of an automobile company, 
which represents a certain type, is of interest : — 

The object of the society is the establishment and management of a fund to be 
known as the "benefit fund," for the payment of definite amounts to employees 
contributing thereto, who are to be known as "members," when under the regula- 
tions they are entitled to such payment; and the establishment and administration 
of a service pension fund and the establishment of such other funds or plans as 
may, from time to time, be determined upon by the company, the general man- 
ager or advisory committee. 

The general manager appoints a superintendent who has charge of all business 
pertaining to the society. He employs such clerks and other assistants, subject to 
approval of the general manager, as are necessary, prescribes the forms and blanks 
to be used, certifies all bills and pay rolls of the society, signs all warrants for pay- 
ments of benefits and other authorized expenses, furnishes the committee such re- 
ports as they require, decides all questions properly referred to him, and exercises 
such other authority as is conferred upon him by the general manager or by the 
committee. 

There is a medical director and one or more medical examiners, and such other 
attendants as are required, appointed by the general manager. The medical 
director, subject to the control and approval of the superintendent, has general 
supervision of the medical and surgical affairs of the society. 

The medical director and medical examiners make the required physical exam- 
inations of applicants for membership and changes in class in the benefit fund, 
report the condition of sick and injured, advise and prescribe for sick members at 
the office of the society, or elsewhere, as the superintendent directs, decide when 
members are disabled and when they are able to work, and perform such pro- 
fessional and other duties as is required by the superintendent. 

The medical director and medical examiners render professional service only 
in the medical examiner's office, unless otherwise directed by the superintendent, 
and do not accept fees or other remuneration for such, or other service, under any 
circumstances. 

The benefit fund consists of contributions from members thereof, income derived 
from investments and appropriations, loans or gratuities by the company or others. 

The moneys received for the benefit fund are held by the company in a separate 
account in trust for the society. The committee directs the investment of money 
which is not required for immediate use. 

The company, being the trustee and guarantor of the benefit fund, the invest- 



1917.] HOUSE — No. 1850. 197 

ments are in such securities as are approved by the general manager, and are in 
the name of the company " in trust for the society." 

If the amount contributed by members of the benefit fuDd, with interest and other 
income, is not sufficient to pay the benefits as they become due, the company ad- 
vances from its own treasury whatever sums may be necessary for this purpose, 
reimbursing itself with interest at the rate of 5 per cent, per annum when the con- 
tributions of members and other income are sufficient therefor. 

If at any time there is a surplus, after making due allowance for liabilities, 
greater than seems necessary to meet current benefits and to provide a reasonable 
contingent fund, such surplus is used in reducing the rates of contribution or in- 
creasing the benefits to members in such a manner as is determined by a vote of 
two-thirds of a quorum of the committee. 

The condition of the account books of the benefit fund at the close of each 
fiscal year is audited and reported upon by a competent person or persons, selected 
for that purpose by the committee. 

There is an advisory committee of 20 members and a chairman, all of whom, 
to be eligible, must be members of the benefit fund, constituted as follows: — 

The general manager of the company is ex officio a member and chairman of the 
committee, and he has power to appoint any other person to represent him as 
chairman and cast his vote at any meeting of the committee which he is unable to 
attend. 

The other members of the committee are chosen annually in November to serve 
one year from the first day of Januarj^ next succeeding, or until their successors 
are chosen, as follows: — 

One-half is appointed by the general manager, and one-half elected by the em- 
ployees who are members of the benefit fund, from among themselves on basis 
of membership, in the different departments, as provided in the following regu- 
lation: — 

The members of the committee chosen by members of the benefit fund are elected 
by ballot. One member is elected from each of ten subdivisions of the works and 
offices known as "election districts," such districts being apportioned and rear- 
ranged annually according to membership in the benefit fund, and duly announced 
by shop bulletin notices a reasonable time before each annual election: provided, 
however, that the division of the works known as the body plant is represented by 

at least two members, and that division of the works known as the 

is represented by at least two members. The ballots are taken and the count 
certified, under oath, by tellers. The member receiving the greatest number of 
legal ballots in and from his individual district is declared elected. 

The members to serve upon the committee for the first year are chosen by the 
general manager from the various election districts, restricted in accordance with 
section 16 of these regulations. 

The election tellers are selected by the shop members of the advisory committee, 
but no member of the fund known to be a candidate for membership on the advisory 
committee, nor any member of the advisory committee, is eligible for appointment 
as a teller. 

No officer, foreman, assistant foreman, inspector, boss or office employee of the 
company is eligible for election to represent the members. 

In balloting for members of the committee each member of the benefit fund in 
good standing is entitled to cast one vote, but no voting by proxy is permitted. 

In event of termination of service of any member of the committee, or of his 
withdrawal from or loss of membership in the benefit fund, his membership on the 
committee thereupon terminates. 

Any vacancy among the members elected by the contributing employees is 
filled by the succession to the position of the employee who received the next highest 
number of votes of members of the same district from which the retiring member 
was elected at the last election, and in default of any such person the majority of 



198 SOCIAL INSURANCE. [Feb. 

the elected members of the advisory committee fills the vacancy by electing a 
member from the same district as the retiring member. 

Any vacancy among the members chosen to represent the company is filled by 
appointment by the general manager. 

Such members, and the members as chosen by the general manager for the original 
committee, serve until their successors are chosen as above provided. 

The superintendent is ex officio secretary of the committee, but not a member 
thereof. 

The committee has general supervision of the operations of the society, and sees 
that they are conducted in accordance with the regulations. 

The committee holds stated meetings once in three months, at such time and 
place as the chairman determines, and meets at other times at the call of the chair- 
man. A quorum of the advisory committee consists of ten members and the 
chairman. Not less than five members who have been elected, and five who have 
been appointed by the general manager, are necessary to constitute a quorum at 
any meeting. 

It is the duty of the chairman to call special meetings of the committee upon the 
written request of five of its members. 

Amendments to the regulations of the society are proposed to the committee at 
any meeting by any member of the committee. Amendments so proposed are 
acted upon at any subsequent meeting, but no amendment is operative unless 
adopted by a vote in the affirmative of a majority of the whole committee, and 
duly announced by the superintendent; and any amendment so adopted and 
announced is binding upon the members of the benefit fund and all persons claiming 
through them from the date specified in the announcement of the same. 

Membership in the benefit fund is based upon an application in the following 
form : — 



Principal Application for Membership in the Benefit Fund of the Com- 
pany. 
To the Superintendent of the Mutual Benefit Society. 

I, of in the county of 

and State of now employed by 

Company at its works, do hereby apply for member- 
ship in the benefit fund of the Society, and consent and agree 

to be bound by the regulations of said society, which regulations I have read or 
have had read to me, and by any other regulations of said society hereafter adopted 
and in force during my membership. 

/ aho agree. That the said company, by its proper agents, and in the manner 
provided in said regulations, shall apply, as a voluntary contribution from any 

wages earned by me under said employment, the sum of cents per 

week for the purpose of securing the benefits provided in the regulations for a 
member of the benefit fund of the class. 

Unless I shall hereafter otherwise designate in writing, with the approval of the 

superintendent of the Society, death benefit shall be payable 

to my wife (name in full) , if I am married at the time 

of my death, provided I have given written notice of my marriage to the superin- 
tendent of the benefit society; or if I have no wife living, then to my children 
collectively, each to be entitled to an equal share; or if there be no such children 

living, then to my (friend or relative) name of 

if living; and if not living, then to my father and mother jointly or the survivor; 
or, if neither be living, then to my next of kin, payment in behalf of such next kin 
to be made to my legal representatives; or, if there be no such next of kin, the death 
benefit shall lapse and the amount thereof shall remain as a part of the benefit fund 
without claim for the same. 



1917.] HOUSE — No. 1850. 199 

Any funeral or other expenses incident to my death, which shall have been paid 
by the superintendent of the Society, in accordance with the regu- 
lations, shall be held to be in part payment of said death benefit, and shall be 
deducted from the total amount thereof before payment to the person or persons 
entitled to receive the same. 

I also agree, That this application- upon approval by the superintendent of the 
society shall make me a member of the benefit fund on and from the date specified 
in such approval, and constitute a contract between myself and the said company; 
and that the same shall not be voided by any change in the character of my service, 
or locality where rendered, while in the employment of said company, nor by any 
change in the amounts applicable from my wages to the benefit fund, which I may 
hereafter consent to; and that the agreement that the above-named amount shall 
be appropriated from my wages shall also apply to any other amounts which I may 
agree to pay under the provisions of said regulations by reason of changes made as 
aforesaid, and shall constitute an appropriation and assignment in advance of 
such portion of my wages, to the said company in trust for the benefit fund, for 
the purpose of maintaining my membership therein, which assignment shall have 
precedence over any other assignment by me of my wages, or of any claim upon 
them on account of liabilities incurred by me. 

J also agree, For myself and those claiming through me, to be specially bound by 

regulation numbered , providing for final and conclusive settlement of 

all claims for benefit or controversies of whatsoever nature by reference to the 

superintendent of the Society, and an appeal from his decision to 

the advisory committee. 

I also agree, That any untrue or fraudulent statement made by me to the medical 
examiner or to the medical director, or any concealment of facts in this application, 
or any attempt on my part to defraud or impose upon said benefit fund, or my 
resigning from, or leaving the service of said company, or my being relieved, in- 
definitely suspended or discharged therefrom, shall forfeit my membership in said 
benefit fund, and all benefits, rights or equities arising therefrom, except that such 
termination of my employment shall not (in the absence of any of the other fore- 
going causes of forfeiture) deprive me of any benefits to the payment of which I 
may be entitled by reason of disability beginning and reported before and con- 
tinuing without interruption to and after such termination of my employment, as 
provided in said regulations. 

I certify, That I am correct and temperate in my habits; that, as far as I am 
aware, I am now in good health, and have no injury or disease, constitutional or 
otherwise, except as shown on the acco'mpanying statement made by me to the 
medical officer, which statement shall constitute a part of this application. 

In witness whereof, I have signed these presents at , in the 

county of , State of , this day of 

, A.D. 191 , this application to take effect at once, or 

on such subsequent date as may be designated by said superintendent: provided, 
however, that if I become disabled before said date and continue disabled beyond 
said date this application shall not take effect until the first day after my recovery. 



Signature of Applicant. 

No Department . 

Witness: Residence 

The foregoing application is approved at the office of the superintendent at 
this day of A.D. 19 . 



Superintendent of Society. 



The application in the foregoing form which is made by an employee is known 
as his "principal application." 



200 SOCIAL INSURANCE. [Feb. 

Upon the approval of the principal application by the superintendent the appli- 
cant is a member on and from the date specified in such approval, and the super- 
intendent issues to him a certificate of membership attached to a copy of the regu- 
lations then in force. 

A special form of supplementary application is used by members applying to 
enter higher classes. 

If any applicant for membership or for change in membership has any physical 
defect which precludes the approval of his application if presented unconditionally, 
his application may nevertheless be approved, provided that he executes an agree- 
ment in writing, satisfactory to the superintendent, to the effect that he is not 
entitled under his membership to any benefits for disability caused by, arising from, 
or growing out of such defect, such agreement to be attached to and made a part 
of his said application, and such modification of the foregoing prescribed forms of 
principal application and supplementary application is hereby authorized. 

In case an applicant for membership, or for change in membership, should be 
rejected solely on account of unfavorable health history, either family or personal, 
or for other just causes, he may be eligible for partial membership on recommenda- 
tion of the medical director and the approval of the superintendent. For such 
partial membership he contributes at the regular rates for the full membership, and 
is eligible for half rate for disability or death benefits. 

All male employees of the company under the regulations are contributors to 
the benefit fund, and are designated as "members of the benefit fund." 

In referring to employees of the company the word "service" means employment 
by this company, and the service of any employee is regarded as continuous for 
the time during which he is continuously in the employ of this company. 

There are three classes of members. The highest class in which an employee 
may be a member is determined bj r the findings of the physical examination, and 
by the amount of his average monthly earnings, as follows: — 



Monthly Pay. 


Class. 


Less than $40, 

$40 or more, but less than $81 

$81 or more, 


First. 

Second. 

Third. 



Any male employee who is in the employ of the company on , 

upon approval of his application by the superintendent becomes a member in the 
highest class allowed by his pay, or in any lower class. 

Any member not over sixty years of age upon passing a satisfactory physical 
examination, and approval of his application by the superintendent, changes to 
any higher class allowed by his pay, such change becoming effective thirty days 
after formal approval by said superintendent. 

Any member may, upon the first day of any month, change to a lower class, upon 
written notice to the superintendent on the prescribed form, before the fifteenth 
day of the month preceding. 

An employee cannot remain a member in a higher class than that allowed by his 
pay. 

If a member declines to effect a proper reduction of class under the foregoing, 
the superintendent has authority to cancel his membership. 

The superintendent has authority to reduce the class or to cancel the member- 
ship of any member upon receiving reliable evidence of habitual or frequent drunken- 
ness, disreputable or unlawful conduct at any time, or for persistent disregard of 



1917.] HOUSE — No. 1850. 201 

the regulations of the society by such member when disabled. Written notice of 
such cancellation of membership is given the member, and refund of contribution, 
if any be due, accompanies the notice and is specifically mentioned therein. 

Any member who is furloughed, suspended or otherwise temporarily relieved 
from the service for a specified time, not to exceed two months, retains his mem- 
bership during such absence, subject to the approval of the superintendent, by 
paying his contribution in advance. Ho notifies the superintendent at the be- 
ginning of such absence, specifying the time set for return to duty, and if at that 
time the member does not return to duty his membership in the benefit fund there- 
upon terminates unless otherwise previously arranged by him with the superin- 
tendent. 

If any member, who is furloughed, suspended or otherwise temporarily relieved 
from the service for a specified time, but retains his membership during the period 
of such furlough, suspension or relief from service, engages his services to any other 
person, firm or corporation for hire, and during the continuance of such service and 
in the performance of the duties thereof sustains injuries, partially or totally dis- 
abling him, then he is not entitled to draw benefits. 

When a member resigns from the service, or leaves the service without notice, 
or is relieved or discharged therefrom, or indefinitely suspended from duty, his 
membership in the benefit fund terminates with his employment, and he is not 
entitled to any benefits for time thereafter, except such as he is entitled to by 
reason of disability beginning and reported before and continuing without in- 
terruption to and after such termination of employment. 

WTien any member absents himself from duty for a period of six days without the 
permission of his employing officer previously obtained, or without giving, mean- 
while, reasons for absence satisfactory to his employing officer, he is held to have 
left the service without notice, and his membership is held to have terminated on 
the day preceding such absence. If such member is reinstated in the service he is 
also reinstated in membership upon approval of the superintendent. 

If a member is relieved from the service and is afterwards re-employed he be- 
comes a member of the benefit fund, although then over sixty years of age, upon 
application at the time of his employment, upon passing a satisfactory physical 
examination in which his physical condition at the termination of former employ- 
ment is given due consideration, and upon approval of his application by the 
superintendent. 

When a member is in arrears for four weeks his membership thereupon ceases. 
If a member resumes work for the company before he has been in arrears four 
weeks he is protected from the time of resuming work, subject to the approval of 
the medical director and the superintendent, and the arrears are paid on the next 
pay roll. 

Members keep the superintendent of the benefit society informed of their ad- 
dresses and of any change therein. A member's place of residence when on duty 
is held to be the last address given the benefit society. 

The word "contributions," wherever used in these regulations, is held and con- 
strued to refer to such designated portions of wages payable by the company to an 
employee as he agrees in his application that the company apply for the purpose 
of securing the benefits of the benefit fund or of making such cash payments as 
it is necessary for a member to make for said purpose. 

Contributions for full membership are made each two weeks on the company's 
regular pay day, in advance, at the following rates: — ' 

First class wages, less than $40 per month, 10 cents per week. 
Second class wages, $40 or more, but less than $81 per month, 20 cents per week. 
Third class wages, $81 and upwards per month, 30 cents per week. 
If a member's contribution is omitted from the pay roll in error, the fact that 
such deduction has not been made does not debar him or his beneficiaries from 
benefits to which they would otherwise be entitled. 



202 SOCIAL INSURANCE. [Feb. 

When a member has no wages on the pay roll, any contribution due from him 
must be paid in cash to the superintendent, otherwise he is in arrears. 

No member falls in arrears for contributions while drawing benefits for disability, 
and the payment of contributions by the member is not required during any period 
in which said member is drawing payments for disability. 

No deduction on account of benefit fund is made from the pay of an applicant for 
membership, and no increase or deduction is made from the pay of an applicant for 
increase of class, without instructions from the superintendent, and any deduction 
made to the contrary is held to be in error, and is due him as a refund if the applica- 
tion is not approved. 

When a member's service terminates there is due him as a refund any excess 
of contribution he made above what is necessary to adjust his accounts to, and in- 
cluding the last day of the week in which he leaves the service, but no refund is due 
on the death of a member. 

Any refund of contributions due a member is payable upon application therefor 
by such person, if made within twelve months after termination of membership, 
and is made, by warrant or otherwise, in conformity with the financial methods of 
the society upon surrender of membership certificate. 

Wherever used in these regulations the word "disability" is held to mean (a) 
physical inability to work by reason of sickness, or (6) physical inability to work 
by reason of accidental injuries. The word "disabled" applies to members thus 
physically unable to work; the decision as to when members are disabled and when 
they are able to work rests with the medical officers. The decision as to whether 
any disability shall be considered a relapse or an original disability rests with the 
medical officers. When a disability is classed as a relapse the time of such dis- 
ability is considered a part of the original disability in determining the length of 
time for which benefits are payable. In considering the question of disability, sub- 
jective symptoms or alleged feelings are given due weight, but these in themselves, 
unsupported by objective and discoverable symptoms, do not entitle a member to 
be considered disabled. 

When a member becomes disabled be notifies the superintendent immediately, 
or causes him to be notified. In reporting disability the member also gives his 
house address. If he fails to give notice until he recovers he is not entitled to 
benefits unless he proves his disability to the satisfaction of the superintendent, 
and gives satisfactory reasons for failure to give notice. If he gives notice during 
his disability, but delays in so doing, he is not considered disabled before the day 
on which notice is given unless he proves his disability before that day to the satis- 
faction of the superintendent, and gives satisfactory reasons for delay in giving 
notice. When a member becomes disabled it is his duty, unless incapacitated 
therefrom by his disability, to report immediately in person to the medical ex- 
aminer- at his office during office hours. It is the duty of a disabled member, not 
confined to the house by disability, to report at the medical examiner's office from 
time to time as requested, and to keep any other appointment made by that officer 
or the superintendent. Members who avoid the medical officers, or neglect to 
report or keep appointments as herein provided, are not entitled to benefits. 

If a member who has been notified by the medical officer as able to work is not 
able to on the day set, he immediately communicates with the medical officer, re- 
porting to him in person if possible; otherwise he is not considered disabled on or 
after the day set for his return to work. 

When a member becomes disabled during definite suspension, furlough or leave 
of absence, and while away from his usual place of residence when on duty, he is 
not entitled to benefits unless he reports his disability immediately as required by 
the regulations, and proves his disability while absent to the satisfaction of the 
superintendent. In case a disabled member wishes to absent himself for any length 
of time from his usual place of residence when on duty he first sees the superintend- 
ent and medical director, and obtains approval of absence for a specified time. 



1917.] HOUSE — No. 1850. 203 

He furnishes to the medical director a satisfactory certificate, informs him of his 
address and reports to him immediately on his return. If such disabled member 
goes away and remains away without previously consulting the medical director 
or superintendent, and obtains approval of absence for a specified time, or over- 
stays his leave, he is not entitled to benefits for any time of absence unless he proves 
his disability while absent to the satisfaction of the superintendent, and gives sat- 
isfactory reasons for failure to consult the medical director before leaving. 

A member is not entitled to receive benefits continuously for more than twenty- 
seven weeks for any disability. 

In case of, and during continuance of, disability after payment of twenty-seven 
weeks' benefits, a member retains title to death benefit for one year from date of 
expiration of limit of disability benefits, provided he keeps the superintendent in- 
formed of his address, and furnishes him monthly satisfactory evidence of con- 
tinued disability; otherwise his membership terminates. 

After a member has sufficiently recovered from disability, for which twenty- 
seven weeks' benefits have been paid, to resume work, he is not restored to mem- 
bership, nor is he eligible for benefits, until his complete recovery is assured by 
thorough physical examination by the medical examiner, and his membership 
formally restored in writing by the superintendent. 

A member who has drawn twenty-seven weeks' continuous benefits is not re- 
quired to make full contribution until restored to full membership. A member is 
not entitled to benefits for disability from any cause while still disabled from a 
preceding cause. If a disabled member declines to accept benefits he does not 
make contributions nor retain title to benefits. If such member afterwards accepts 
the benefits to which he is entitled, a proper adjustment of contribution is made. 

In any case of grave injury or chronic sickness, where the member desires to 
accept a lump sum in lieu of the benefits which might become due to him or his 
account, and in full of all obligations of the society arising from his membership, 
the superintendent has authority to make full and final settlement with such mem- 
ber on such terms as may be agreed upon in writing. All such settlements are 
reported to the committee at their next meeting. 

In computing benefits the term of disability is considered as beginning upon the 
first day upon which no wages or less than one day's wages are paid because of 
disability, and this day is called "first day wages not paid." 

Benefits are paid in conformity with the financial methods of the society and on 
warrants drawn by the superintendent (or in his absence by such other person as 
is authorized by the general manager), upon his receiving satisfactory certificates 
respecting the claim required of him. 

Benefits on account of disability are payable each two weeks or oftener, on a 
day designated by the superintendent. 

Benefits payable on account of the disability of a member are payable only to 
such member or, in accordance with his written order when approved by the super- 
intendent, to his legal representative. 

When, in the opinion of the medical director, a member is mentally incompetent, 
di ability benefits due him are, at the discretion of the superintendent, paid to 
his wife or to some member of his family, or to his employing officer, for the use 
and benefit of the member, and such payment is a bar to any subsequent claim on 
the part of the member or his legal representative for the amounts so paid. 

Benefits are not payable for disability directly or indirectly or partly due to 
intoxication or to use of alcoholic liquors as a beverage, or to immoderate use of 
stimulants or narcotics, or to unlawful acts or immoralities or venereal disease, 
however contracted, or to the results thereof, or to orchitis, except when directly 
due to and in connection with an attack of mumps, or to epididymitis, stricture, 
urethritis, glandular swelling or abscess in the groin, however caused, or to fighting, 
unless in self-defence against unprovoked assault, or to any other encounter, such 
as wrestling, fooling, shuffling and the like, or to injury received in any brawl or 



204 SOCIAL INSURANCE. [Feb. 

any liquor saloon, gambling house or any disreputable resort. During disability 
called under this regulation, members who keep the superintendent informed of 
their addresses and furnish him monthly satisfactory evidence of continued dis- 
ability retain title to death benefit for a period of thirty-nine weeks; otherwise, 
and after such period, their membership terminates. 

Benefits are not due on account of disability beginning or death occurring while 
a member is in arrears. 

Members are not entitled to benefits if they decline to permit the medical officer 
to make or to have made by any other physician such examination as he may deem 
necessary to ascertain their condition when disability is claimed. 

Disabled members must take proper care of themselves and have suitable medical 
treatment; benefits are discontinued if members refuse or neglect to comply with 
the recommendations of the officers of the benefit society as to proper care and 
treatment. 

Unless a member previously arranges with the superintendent for absence in 
foreign lands, benefits will not be paid on account of disability or death occurring 
at any place outside of the continental United States, except, however, that the 
provisions of this section do not apply in cases of death occurring in the Province 
of Ontario, Dominion of Canada. 

Any claims for disability to be valid must be made within thirty days from the 
time when such benefits accrue, and any claim for death benefit to be valid must be 
made within six months from death of member. 

A person entitled to benefits for disability beginning before and continuing after 
termination of service is not entitled to benefits on account of disability beginning 
or death occurring after such termination, unless directly due to the sickness or 
injury occurring during the disability, which existed before and at the time of such 
termination of service. 

The following benefits are paid to members or beneficiaries entitled thereto: — 

Payment is made for each day, not including Sunday, of disability classed as 
due to sickness or accident, except as restricted by the provisions of this section. 
No benefits are paid for any disabilities classed as due to sickness which does not 
incapacitate the member for a period of at least seven days, but if the incapacity 
extends beyond a period of fourteen days payment is made from the first day of 
such disability, but for a period not longer than twenty-seven weeks, at the follow- 
ing rates: — 

To a member of the first class, . . . . . $1.00 per working day. 

To a member of the second class, . . . . . $1.50 per working day. 

To a member of the third class, . . . . . $1.75 per working day. 

No member has authority to contract any bills against the society, and nothing 
herein is held to mean or imply that the society is responsible for the payment of 
such bills as a member may contract or his surgeon may charge. 

To establish a claim for benefits due to accident disability the accident must be 
reported immediately upon its occurrence, and there must be external, positive and 
visible evidence of physical injury by accident sufficient to cause immediate dis- 
ability, and whenever possible the injured party must call at once, or as soon as 
practicable thereafter, at the medical examiner's office for examination. 

In case of alleged sprain, strain, wrench and the like, where external physical 
proof of disabling injury is lacking, the member must furnish substantial history, 
satisfactory to the medical officer, of violence accidentally inflicted sufficient and 
liable to cause disabling injury; otherwise benefits will not be allowed. 

When a member meets with any accident from which disability may result, and 
on account of which he wishes to reserve the right to claim benefits, he reports the 
accident to the superintendent immediately upon its occurrence, and also reports 
in person to the medical officer when possible. 



1917.] HOUSE — No. 1850. 205 

A member who has drawn benefits continuously for a period of twenty-seven 
weeks, and remains disabled, retains title to his death benefit for one year from the 
date of expiration of limit of benefits without making contributions during the 
continuance of that disability, provided he keeps the superintendent informed of 
his address and furnishes him monthly satisfactory evidence of continued dis- 
ability; otherwise his benefit terminates. If such member resumes work for the 
company he does not resume contributions nor titles to benefit until formally 
accepted by the superintendent after physical examination by and approval of 
the medical director. 

No member is entitled to benefits for sickness, nor are death benefits payable for 
death resulting from sickness, unless said disability begins not less than fifteen days 
after date of formal acceptance as a member. 

To establish a claim for sick benefits there must be positive evidence of acute or 
constitutional disease sufficient to cause disability. 

No member who has received sick benefit for a period of twenty-seven weeks 
continuously is entitled to benefits for the same disease until after the expiration 
of six months from the time his recovery, or return to work, is reported. 

Payments in accordance with the conditions prescribed in the regulations upon 
the death of a member are as follows: — 

For members of the first class, ........ $150 

For members of the second class, ........ 200 

For members of the third class, . . . . . . . . 250 

Death benefit is not payable in case of death due directly or indirectly to unlawful 
acts of the deceased member, or at the hands of justice. 

Death benefits, together with any unpaid disability benefits, are payable to the 
beneficiary of a deceased member upon proof of claim. 

A part of the death benefit is, at the discretion of the superintendent, paid before 
final settlement to meet funeral or other urgent expenses incident to the death of a 
member. 

In any controversy, claim, demand, suit at law, or other proceeding between any 
member, his beneficiary or legal representative and the company or the benefit 
society, the certificate of the superintendent as to any facts appearing in the records 
of the benefit society or of the company, or his statement that any writing is a 
copy taken from said records, or of any instrument on file in office of said society, 
or with the company, or that any action has or has not been taken by the committee 
or by the company, is prima facie evidence of the existence of such records and 
their accuracy, and of all the facts therein stated. 

All questions or controversies of whatsoever character arising in any manner, 
or between any party or persons in connection with the benefit society or the 
operation thereof, as to any claim for benefits preferred by any member or his legal 
representative or his beneficiary or any other person, or as to the construction of 
language or meaning of the regulations, or as to writing, decision, instruction or 
acts in connection with the operation of the society, is submitted to the determina- 
tion of the superintendent, whose decision is final and conclusive thereon, unless an 
appeal is taken to the committee within thirty days after notice of such decision 
given to the parties interested. 

When an appeal is taken to the committee it is heard by said committee at their 
next meeting, or at such future meeting or time as they designate, provided 
twenty-four hours' notice of said meeting be given to the appellant, and is deter- 
mined by a vote of the majority of a quorum, or of any other number not less than 
a quorum, of the members present at such meeting, and the decision arrived at 
thereon by the committee is final and conclusive upon all parties without excep- 
tion or appeal. 

The company may at any time elect to withdraw its support of the society as 



206 SOCIAL INSURANCE. [Feb. 

defined in these regulations by a written notice addressed to the advisory committee 
at least ninety days prior to the date of such withdrawal. 

The existence of this society is terminated at any time by a majority vote of the 
advisory committee, and in that event the moneys in the fund are held by the 
company, in trust, for the payment of outstanding claims and liabilities, and upon 
the completion of such payments the money then remaining in the fund is divided 
into shares of uniform amount equal in number to the total weeks' membership, of 
all the members in good standing on the date of termination and existence, &nd 
reimbursement is made such members on the basis of one share for each week for 
which they have been contributors to the fund. 

This following account of the administration of an employees' benefit 
association is of interest because it includes a detailed account of the ad- 
ministration of their pension fund: — 

EMPLOYEES' BENEFIT ASSOCIATION IN A COMPANY HAVING PLANTS 
IN SEVERAL DIFFERENT STATES. 

In this association the members are divided into two classes: — 

Class A includes all members not employed at the manufacturing plant, mills 
or mines, and all others not entitled to benefits under any workmen's compensation 
law or the company's industrial accident plan. 

Members of this class are entitled to claim from the benefit association the 
benefits provided by its regulations for sickness, injuries and death, occurring 
whether on or off duty. 

If any member of Class A shall claim, or be entitled to claim, under any work- 
men's compensation law or the company's industrial accident department plan, 
benefits for injury or death arising out of and in the course of his employment, 
such members shall not receive benefits from the benefit association on account 
of such injury or death. 

Class B includes all members employed at the company's plants, twine mills 
and mines, and all others who are, or may hereafter become entitled to benefits under 
any workmen's compensation law or the company's industrial accident depart- 
ment plan. 

Members of Class B or their beneficiaries shall be entitled to receive from the 
benefit association, subject to its rules and regulations, benefits for sickness and 
for injury or death occurring while off duty. 

The contributions from members of Class A shall be If of the wages received. 
The contributions from members of Class B shall be If per cent, of the wages re- 
ceived. 

This was the only establishment fund investigated where the contributions were 
on a percentage basis. 

This association also provides for disability due to pregnancy, which shall be 
limited to three months, and said benefit shall be paid in a lump sum, provided in 
all cases, however, claimant shall have been a member of the benefit association 
for nine months. 

In regard to accident benefit, the plan is somewhat more complicated, as follows: — 

1. Payment for each working day or part of working day, during disability 
classed as due to accident, for a period not longer than fifty-two weeks, shall be 
one-half of member's average pay on the basis of the last sixty days worked. 

Any member who has received accident disability benefits continuously for a 
period of fifty-two weeks, as provided in section 28, shall be entitled to no further 
benefits of any nature whatsoever, and his membership shall cease unless it is 
continued for death benefits only, as provided in section 15. If, after recovery, 
said member resumes active work with one of the companies, he shall be considered 



1917.] HOUSE — No. 1850. 207 

by the association as a new employee, and shall be subject to all conditions of sec- 
tion 13. 

Accident benefits provided in this section are payable to the members of Class A 
for accidents occurring either on or off duty, provided, if any member of Class A 
shall claim, or be entitled to claim, under any workmen's compensation law or the 
company's industrial accident department plan, benefits for injury resulting from 
an accident arising out of and in the course of his employment, such member shall 
not be entitled to receive from the benefit association any benefits on account of 
such injury. 

To members of Class B accident benefits will be paid only for accidents occurring 
while off duty and accidents not arising out of and in the course of the employ- 
ment. 

Note. — Benefits for accidents to members of Class B, occurring while on duty 
and in the course of their employment, are provided by workmen's compensation 
laws or the company's industrial accident department plan. 

2. To establish a claim for accident benefits, the accident must be reported 
immediately upon its occurrence, and there must be external, positive and visible 
evidence of physical injury by accident sufficient to cause immediate disability. 
In cases of alleged sprain, strain, wrench, and the like, where physical proof of 
disability is lacking, a member must furnish substantial history, satisfactory to 
the superintendent, of violence accidentally inflicted sufficient and liable to cause 
disabling injury; otherwise accident benefits will not be allowed. 

Special provisions are made for serious accidents, such as loss of limbs, eyes, etc. 

(a) Feet and Hands. — If a member receives accidental injuries producing the 
immediate severing of, or necessitating, in the opinion of a medical examiner of 
the association, the amputation of, a hand or foot at or above the wrist or ankle, 
he shall receive a total amount equal to one year's average wages. 

In case of loss of both hands or both feet, or of one hand and one foot, he shall 
receive twice the above benefits, or a total amount equivalent to two years' average 
wages. 

(b) Eyes. — If a member receives accidental injuries resulting in the total and 
irrevocable loss of sight of one eye he shall receive a total amount equal to one-half 
his average yearly wage. 

For the total and irrevocable loss of the sight of both eyes he shall receive the 
total amount of two years' average wages. 

Special benefits provided in this section are payable to the members of Class A 
for accidents occurring either on or off duty, provided, if any member of Class A 
shall claim, or be entitled to claim, under any workmen's compensation law or the 
company's industrial accident department plan, benefits for injury resulting from 
an accident arising out of and in the course of his employment, said member shall 
not be entitled to receive from the benefit association any benefits on account of 
such injury. 

Note. — Benefits for accidents to members of Class B, occurring while on duty 
and in the course of their employment, are provided by workmen's compensation 
laws or the company's industrial accident department plan. 

In case of any grave injury or chronic sickness, where the member desires to accept 
a lump sum in lieu of the disability benefits which might become due to him or on 
his account, and in full of all obligations of the benefit association arising from his 
membership, the superintendent shall have authority to make full and final settle- 
ment with such member on such terms as may be agreed upon in writing. All such 
settlements shall be reported to the board of trustees at its next meeting. 

This association maintains also pension systems which were established by the 
directors of the company as an evidence of their appreciation of the fidelity, effi- 
ciency and loyalty of the employees. 

The following is a brief summary of the administration, eligibility, pension 
allowances and conditions. 



208 SOCIAL INSURANCE. [Feb. 

The administration of the pension fund shall be in charge of a pension board 
consisting of five members, who shall all be officers or employees of this company 
or of affiliated or subsidiary companies, and shall be appointed annually by the 
board of directors of this company to serve for one year and until their successors 
are appointed and shall qualify. 

The pension board shall elect a chairman and a secretary from among its members, 

and the treasurer of this company shall be ex officio treasurer of the fund. The 

board may make and enforce rules for the efficient administration of the pension 

^ fund, subject to the approval of the board of directors. The pension board shall 

control the payment of pension allowances under the rules hereinafter stated. 

A majority of the pension board shall constitute a quorum for all purposes. 

The members of the board shall be so chosen that the principal departments of 
the business shall have representation. 

The treasurer of the company shall be the custodian and treasurer of the fund, 
and additions shall be made to said fund yearly, or from time to time, according to 
the aggregate pension allowances and the amount available in the pension fund 
for payment of the same. Should the aggregate pension allowances exceed in any 
one year such sum as the board of directors may have designated as available for 
this purpose, then, unless the board of directors increases the yearly amount usable 
for pensions, a new rate shall be established proportionately reducing all allowances. 

Payments from this fund shall only be made in accordance with and by direction 
of the pension board. 

As to eligibility, the following is noted : — 

The pension board may authorize the payment of a pension to any retired 
employee on the following basis : — 

(a) All employees of this company, and of subsidiary and affiliated companies 
engaged in any capacity, are eligible to pensions as hereinafter stated. 

(b) All male employees who shall have reached the age of sixty-five years, and 
have been twenty or more years in the service, may, at their own request, or at the 
discretion of the pension board, be retired from active service and become eligible 
to a pension. 

(c) All male employees who have been twenty or more years in the service shall 
be retired at the age of seventy years on the first day of the calendar month follow- 
ing that in which they shall have attained said age, unless at the discretion of the 
pension board some later date be fixed for such retirement. Persons occupying 
executive positions are exempt from the maximum age limit. 

(d) All female employees who shall have reached the age of fifty years and have 
been twenty or more years in the service, may, at their own request, or at the 
discretion of the pension board, be retired from active service and become eligible 
to a pension. 

(e) All female emploj^ees shall be retired at the age of sixty years on the first 
day of the calendar month following that in which they shall have attained said 
age, unless at the discretion of the pension board a later date shall be fixed for 
such retirement. Persons occupying executive positions are exempt from the 
maximum age limit. 

A temporary lay-off on account of illness or of reduction of force is not to be 
considered as a break in the continuity of service, but when such absence exceeds 
six consecutive months it shall be deducted in computing the length of active 
service. 

If a person, after leaving the service for more than two years, shall be re-employed 
he shall be considered, in his relation to the pension system, as a new employee. 

The sums which the board of pensions may authorize to be paid monthly to 
employees retired at the age limit shall be as follows: for each year of active service 
an allowance of 1 per cent, of the average annual pay during the ten years next 
preceding retirement; but no pension shall exceed $100 per month or be less than 
$21 per month. 



1917.] HOUSE — Xo. 1850. 209 

(a) Pension allowances shall be paid on the first of each month from the date of 
retirement until the death of employee. 

(b) At the discretion of the pension board these allowances may be continued 
to widows and orphans of a pensioner for a limited period. 

(c) Pension allowances shall be non-assignable, and an attempted transfer or 
pledge of the same shall not be recognized by the pension board, and may in its 
discretion work a forfeiture thereof. 

(d) Pension allowances may be suspended or terminated by the pension board 
in cases of gross misconduct or of any violation of the rules, or, at its discretion, 
may be paid to some member of the family. 

(e) The acceptance of the pension shall not debar any retired employee from 
engaging in any other business which in the judgment of the pension board is not 
prejudicial to the interests of this company or of any affiliated or subsidiary com- 
pany, but he cannot re-enter service. 

(/) No payments for pensions shall be approved by the pension board until 
payments from any relief fund operated by this company, or any affiliated or 
subsidiary company, shall cease. 

The amount of pension granted on account of advanced age will depend, as 
before stated, on two conditions, — the number of years the person has served 
the company, and the amount of his average wages per year for the ten years next 
preceding retirement. Thus, for illustration, if the average pay per year for the 
last ten years of active service equals $600, and if the service has been continuous 
for twenty-five years, the pension would be 25 per cent, of $600, or $150 per year, 
or $12.50 per month. Since the minimum pension has been fixed at $21 per month, 
then to this regular percentage $8.50 would be added, making the minimum sum 
of $21. 

In special cases, where the term of service is less than twenty years, the pension 
and the amount of same, if any, will be determined solely at the discretion of the 
board of pensions. 

In special cases, where the term of service is twenty shears or less, and the employee 
is obliged to discontinue work before arriving at the age of sixty-five years on account 
of total disability, the pension board may, at its discretion, grant a pension. 

In special cases, where the employee occupies an executive, or a semi-executive 
position, and where on account of advancing years his retirement is advisable, the 
pension board may, at its discretion, grant a pension, provided the employee has 
been twenty or more years in the service, and provided, further, that the employee's 
superior officer approves of the retirement on a pension. In determining the 
amount of the pension to be paid, the pension board may, at its discretion, add to 
the actual length of service the number of years represented by the difference be- 
tween the age of the employee at the time the application is made and sixty-five 
years. 

Department heads are expected to keep informed of the whereabouts and phj-si- 
cal condition of former employees receiving pensions, and are required to advise 
the secretary of the board of pensions of the death of the pensioner and of an- 
other circumstances which would affect his monthly payment. 

A plrysical examination by a company surgeon, or, in case of female employees, 
by a surgeon approved by the board of pensions, will be required of employees who 
wish to be retired on a pension allowance because of incapacity. 

An employee wishing to apply for a pension should first take up the subject with 
the superintendent at the works where he is employed, or with the head of the de- 
partment in which he is serving, or with a member of the pension board. A form 
will then be furnished which must be filled out and signed, giving the necessary 
information regarding the applicant's age, length of service and wages. This 
formal application must be signed by the work's superintendent, or head of de- 
partment employing applicant, and then sent to the secretary of the pension board 
at his office. 



210 SOCIAL INSURANCE. [Feb. 

Neither the establishment of this system nor the granting of a pension, nor any- 
other action now or hereafter taken by the pension board or by the officers of this 
company, shall be held or construed as creating a contract, or giving to any officer, 
agent or employee a right to be retained in the service, or any right to any pension 
allowance, and the company expressly reserves, unaffected hereby, its right to 
discharge without liability, other than for salary or wages due or unpaid, any em- 
ployee, whenever the interests of the company in its judgment may so require. 

The Flint Vehicle Factories Mutual Benefit Association is of special 
interest because it is the only one, so far as I have been able to find out, 
that is maintained and managed entirely by the employees. 

The employers contribute nothing and have no word in the management. 

In addition, the association manages a club with a comfortable house, 
with sleeping quarters, gymnasium, reading and lounging rooms, etc. The 
dues are merely nominal, but one must be a member of the association 
to be eligible for membership. 

The following is a copy of the Constitution and By-Laws of the Flint 
Vehicle Factories Mutual Benefit Association: — 

IMPORTANT BEAD THIS AGREEMENT. 

You will be responsible for notification to the secretary in case of sickness or 
accident: fill out the enclosed "Notice of Disability," signed by your foreman, and 
mail to the secretary within one week. 

Be sure and notify the secretary, at the Vehicle Workers' Club Rooms, 128 East 
Kearsley Street, Bell Phone 313, and give residence, street and number, also what 
factory employed. (See Article V, section 4.) 

Dues are to be paid each two weeks in advance. If they are not deducted on the 
regular pay days it is your duty to pay them to the secretary. If your dues are 
not paid you will not receive benefits in case of disability. 



CONSTITUTION AND BY-LAWS. 

Constitution. 
Article I. 
Section 1. This association shall be known as the Flint Vehicle Factories' 
Mutual Benefit Association. 

Article II. 
Section 1. The object of this association shall be the relief of its members in 
case of sickness, injury or disability which may unfit them for their daily labor, 
and to provide funeral benefits in case of death. 

Article III. 

Section 1. The regular meeting of this association shall be held annually on 
the second Tuesday in January. 

Section 2. Twenty-five members shall constitute a quorum for the transaction 
of business. 

Article IV. 
Section 1. The board of trustees of this association shall be constituted as 
follows: One trustee from each factory: J. B. Armstrong Manufacturing Com- 
pany, Buick Motor Company, Nos. 1, 3, 4, 5, 6, 7, 9, 10, 11, 12, 15, 16, 17, 18; 



1917.] HOUSE — No. 1850. 211 

Champion Ignition Company, Chevrolet Motor Car Company, Dort Motor Car 
Company, Durant-Dort Carriage Company, Flint Varnish Works; Greissell Bread 
Company; Imperial Wheel Company; Mason Motor Company; Michigan Motor 
Castings Company; Marvel Carbureter Company; W. A. Paterson Company, 
Nos. 1, 3; W. F. Stewart Company; Walker- Weiss Axle Company; Weston- 
Mott Company, Nos. 1, 4, 5; and one trustee from each factory that may hereafter 
become connected with the association, to be known hereafter as the "Associated 
Factories." The present board of trustees shall hold office for the term they have 
been elected, or until their successors have been elected. At the annual meeting 
of the association the required number of trustees shall be elected by ballot to 
serve for two years, to fill all vacancies on the board of trustees. Each trustee shall 
be an employee of the factory he represents; also a member of this association. 

Section 2. The board of trustees shall, at the first meeting after their election 
in each year, elect the officers of the association, consisting of a president, a vice- 
president, a secretary and a treasurer, each of whom shall be a trustee of the asso- 
ciation, except the secretary, who may or may not be a trustee. Said officers shall 
hold their office for one year, or until their successors are duly elected and qualified, 
except the secretary and treasurer, who shall hold their offices until March 1 of 
that year. 

Section 3. The board of trustees shall have the management and control of 
the affairs and business of the association, subject, however, to the limitations 
contained in these By-Laws. Five members of the board of trustees shall at all 
times be necessary to constitute a quorum for the transaction of business. 

Section 4. The regular meetings of the board of trustees shall be held at least 
once each month, the time to be fixed by said board. 

Section 5. Upon the retirement of any officer of the association the board shall 
elect his successor. Any vacancy occurring in the board of trustees shall be filled 
by appointment by the board, the appointee to serve until his successor shall have 
been chosen at any regular or special meeting of the association. 



By-Laws. 
Article I. 

Section 1. The president shall preside at all meetings, and shall call special 
meetings at the request of the majority of the board of trustees. He shall sign all 
orders on the treasurer for money. He shall, on the second Mondays in December 
and June, appoint an auditing committee, consisting of three members of the asso- 
ciation, whose duty it shall be to audit the books of the secretary and treasurer, 
and make its report at the next regular meeting of the board of trustees. The 
president shall enforce all rules of the association and perform such other duties as 
shall be required. 

Section 2. The vice-president shall perform the duties of the president in the 
absence of the latter. 

Section 3. The secretary shall keep and preserve all records, receive and deliver 
to the treasurer all moneys due the association, take a receipt therefor, issue notices 
of the meetings, make a report of each regular meeting of the association, and 
perform such other duties as the office may require. He shall give a bond of $1,000, 
and shall receive for his services a salary as determined by the board of trustees. 
At the expiration of his term of office he shall deliver to his successor, books, papers 
and other property that belong to the association. 

Section 4. The treasurer shall receive and deposit in some banking institution 
to be selected by the board of trustees, all moneys belonging to the association, and 
shall pay it out by check on orders signed by the president, secretary and one 
trustee, and all checks must be signed by the treasurer and countersigned by the 



212 SOCIAL INSURANCE. [Feb. 

president. He shall give a bond as specified by the board of trustees, the expense 
of procuring said bonds to be borne by the association. He shall receive for his 
services $50 per year. He shall make a report at each regular meeting of the 
association. 

Section 5. Any member in good standing being disabled, and giving notice to 
the secretary as required by Article V, section 1, this association shall accept the 
certificate of the claimant's attending physician in regard to such disability, sub- 
ject, however, to the provision of section 6 of Article I. 

Section 6. No member shall be entitled to receive any benefits on account of 
sickness, unless he or she is confined to the house on account of such sickness, 
nor for a longer period than ten days after his or her confinement to the house on 
account of such sickness ceases, except by permission of the claims committee. 

Section 7. It shall be the duty of the secretary, on receiving notice of disability 
of any member in good standing, to call on such member at least once each week 
during disability, and to refer all doubtful claims to the regular committee for 
settlement. If they think it necessary they may employ a physician to examine 
the claimant, and report on such disability. If said claimant refuses such exam- 
ination, his claim against the association shall be void. 

Section 8. The board of trustees may levy an assessment on the members of 
the association to meet the contingencies of excessive sickness or accident: pro- 
vided, however, that such assessment shall not exceed 75 cents for Class AA, 50 cents 
for Class A, and 25 cents for Class B members, and that such assessment shall not 
be levied more than twice in one year. Further assessments may be levied by a 
two-thirds vote of the members present at a regular or special meeting, notice of 
such proposed action being stated in a call for said meeting. 



Article II. 

Section 1. Any person in good health, entering the services of any of the 
associated factories for other than temporary employment, may become a member 
of this association upon the next regular pay day of the company by whom he is 
employed, and by accepting employment and joining the association he authorizes 
the company employing him to deduct from his pay on regular pay days the amount 
of his dues, and to pay the same to the secretary of the association. The policy 
shall bear date of the new member's application for membership, and dues shall 
be collected from said date. 

Section 2. No member of the association shall be entitled to benefits from 
sickness until he or she has been a member for twenty-one consecutive days before 
such sickness occurs. Any member will be entitled to benefits in case of accident 
occurring after being a member for five consecutive days. 

Section 3. Membership shall cease upon the suspension or expulsion of a 
member; upon his ceasing to be in the employ of the associated factories for ninety 
days, or for his leaving the city for more than thirty days; or upon his neglecting 
to pay his dues; and it shall be the duty of the secretary to cause the name of the 
above classes to be erased from the roll of membership. Temporary suspension 
from work shall not be considered as ceasing to be in the employ of the company. 

Section 4. You will be responsible for notification to the secretary. In case of 
sickness or accident, fill out the enclosed "Notice of Disability," and mail to the 
secretary within one week. 

Be sure and notify the secretary, at the Vehicle Workers' Club Rooms, 128 
East Kearsley Street, Bell Phone 313, and give residence, street, number, also what 
factory employed. (See Article V, section 4.) 

Dues are to be paid each pay day in advance. If they are not deducted on the 
regular pay days it is your duty to pay them at the secretary's office. If your dues 
are not paid you will not receive benefits in case of disability. 



1917.1 HOUSE — No. 1850. 213 



Article III. 
Section 1. The funds of the association shall consist of the weekly or monthly 
dues of members, assessments and any special gift to the association. 

Article IV. 

Section 1. Membership shall be divided into three classes, — AA, A and B 
classes, AA class to consist of those whose average weekly pay is $12 or more; A class 
to consist of those whose average weekly pay is $7 or more ; B class, of those whose 
average weekly pay is less than $7. Members whose average weekly pay is $12 or 
more may take either the AA or A class, whichever they desire. 

Section 2. The dues in the AA class shall be 15 cents per week; those in A class 
10 cents per week; and in B class 5 cents per week, to be paid to the secretary in 
advance. 

Section 3. All money received shall be placed in one general fund. 

Section 4. That the association set aside 50 per cent, of the earnings of the 
money at interest to be used in taking care of tuberculosis cases. 

Article V. 

Section 1. Any member of the association unable to attend to his or her duties 
through sickness or disability must notify the secretary within one week from the 
date of such sickness or disability, and, upon the written recommendation of the 
attending physician, shall be entitled to receive from the association out of the 
funds then on hand, if a member of the AA class, $1.50 per day; of the A class, 
$1 per day; and if of the B class, 50 cents per day, Sundays excepted, for a period 
of not more than thirteen weeks. 

Section 2. "When a member is entitled to benefits the secretary shall issue an 
order on the treasurer, countersigned by the president and one trustee, and such 
benefit shall be paid weekly in such amounts as the By-Laws provide. 

Section 3. No member shall be entitled to draw benefits for the first five days 
of disability, Sunday not included, but thereafter shall be entitled to benefits, as 
provided by the By-Laws, Article V, section 1. 

Section 4. Any member failing to notify the secretary within one week from 
the date of commencement of sickness or disability shall be considered to be on 
the sick list only from the date of which notice is given to the secretary, except 
when quarantined. 

Section 5. If any member entitled to benefits, and having drawn same and 
returned to work, is again taken sick within a period of one week, such second 
sickness shall be considered as a continuation of the first sickness, and the member 
shall be only entitled to benefits for such a number of days as, added to the previous 
term of sickness, shall make thirteen weeks. 

Section 6. Any member, having drawn benefits for the full term of thirteen 
weeks, shall not be entitled to further benefits, except death, until he or she shall 
have been at work for a period of not less than four weeks; and no one shall draw 
during one year benefits for more than eighteen weeks of disability dating from 
time of commencement of first disability during the previous twelve months; and 
any member drawing for eighteen weeks' disability during twelve months shall 
not be entitled to further benefits on account of disability until she or he shall 
have been at work for a period of sixty days. That any member who shall have 
received the maximum benefits as provided in this section, and who shall thereafter 
be continuously totally disabled, shall, without the payment of further dues, be 
considered in good standing and entitled to receive the funeral benefits herein 
provided for ; provided they report to the secretary every two weeks. 



214 SOCIAL INSURANCE. [Feb. 

Section 7. No benefits shall be paid for any sickness or injury resulting from 
hernia, lumbago or lame back, straining of the lumbar muscles, sciatic rheumatism, 
neuritis, venereal diseases, intoxication or violating the law, fighting or scuffling. 

Sickness and accident indemnity: Monthly benefits shall range from $26 to $40 
per month, according to the class, A or AA. The following is a partial list of the 
diseases covered by our policies, for which we pay indemnity not to exceed eighteen 
weeks in one year, contracted after policy has been in force twenty-one consecutive 
days: lagrippe, inflammation of the lungs, erysipelas, enteritis (inflammation of 
bowels), felons, freezing, fever and ague, diabetes, dysentery, diarrhea, cerebro- 
spinal fever, diphtheria, Bright's disease, bilious fever, cancer, carbuncle, whooping 
cough, pleurisy, piles, catarrhal fever, cholera, congestion of the brain, conjunctivi- 
tis, mumps, bronchitis, boils, blood-poisoning, appendicitis, anthrax, abscess, 
typhoid-fever, influenza, intermittent fever, laryngitis, lockjaw, malarial fever, 
yellow fever, peritonitis, scarlet fever, membranous croup, meningitis, neuralgia- 
pneumonia, inflammation of pancreas, inflammation of brain, inflammation of 
liver, heart disease, gastric fever, inflammation of eyes, sore throat, smallpox, sun- 
stroke, summer complaint, tonsillitis, typholitis, tuberculosis, shingles, perity- 
phlitis, rheumatism (inflammatory). 

Accident indemnity: dislocations, fractures, bruises, broken bones, cuts, crush- 
ing or mangling, gunshot wounds, burns or scalds, bites of dogs or other animals, 
sprained ankle, stroke of lightning, surgical operation, injuries received at home, 
in the office, shop, factory, yard or on the street; injuries inflicted by robbers or 
highwaymen, traveling on passenger trains, steamboats or street cars; walking, 
riding, driving, bicycling, going to or from work, and in all the ordinary vocations 
of life. 

Section 8. The board of trustees may refuse to grant benefits to a member if it 
is shown on investigation that he or she is not entitled to such benefits. No member 
shall leave the city while on disability list without a permit from the secretary. 

Section 9. On the death of any member in good standing, who has been a 
member at least ninety consecutive days at the time such occurs, a funeral benefit 
shall be paid his legal beneficiary, or payment direct to the undertaker and other 
creditors shall be a proper compliance with this section whenever the association 
deems it proper to do so, — if a member of AA class, $75, or if a member of A class, 
$50, or if a member of B class, $25, payable within thirty days after due notice has 
been given to the secretary. 

Section 10. In the event of the death of any member suitable flowers shall be 
procured at a cost not to exceed $5 and presented to the relatives or friends of the 
deceased by the association. 

Section 11. Any person detected in obtaining or attempting to obtain benefits 
fraudulently shall be expelled from the association. The board of trustees may 
cause the name of any such member to be erased from the roll of membership. 

Section 12. All properties of the association held by officers of the association 
at the expiration of their term of office must be turned over to their successors. 

Section 13. A semiannual statement of the financial condition of the associa- 
tion shall be posted in some prominent place in the works of the associated factories. 
Section 14. The bonds required to be given by the secretary and treasurer 
shall be given to such person as the board of trustees may designate, who shall hold 
the same in trust for the association and who shall be entitled, in case of default in 
his own name, to bring all necessary suits or proceedings to enforce the same for 
the benefit of the association. 

Article VI. 

Section 1. The Constitution, By-Laws and Special Rules of the association 

may be amended or repealed at the annual meeting by a two-thirds vote of the 

members present at such meeting; provided, however, that two weeks' notice of 

such intended action shall be given to the secretary by the board of trustees and 



1917.] HOUSE — No. 1850. 215 

inserted in the call for such meeting, and that notice of the meeting shall be posted, 
for at least one week previous to the meeting, in the prominent places of each of 
the associated factories, and all proposed amendments shall be voted on as posted ; 
also for the transaction of such other business as may legally come before the 
meeting. 

O. J. Schneider, President. 

F. W. Boswell, Secretary. 
128 East Kearslet Street, Bell Phone 313. 

Remember, if your dues are not paid you will not receive benefits in case of disability. 

The following is a detailed account of the supplementary compensation 
plan of the Flint Vehicle Factories' Association: — 

The supplementary compensation plan was the outcome of a desire on the part 
of the manufacturers to extend aid to those of their employees who are still sick 
and in need of financial assistance after they have received the thirteen weeks' 
benefits provided by the policies of the Flint Vehicle Factories' Mutual Benefit 
Association. 

The only conditions necessary for a workman to avail himself of the provisions 
of this plan are — 

(a) That he (or she) be an employee of one of the above-named factories at the 
time the sickness began. 

(b) That he (or she) be a member in good standing (i.e., with all dues paid in 
full) of the Flint Vehicle Factories' Mutual Benefit Association at the time the 
sickness began. 

(c) That he (or she) shall have been unable to work for a period exceeding 
thirteen weeks, during which time he (or she) shall have drawn all benefits provided 
for by the provisions of the Flint Vehicle Factories' Mutual Benefit Association 
policy, or, in case death occurs at any time, the dependents will immediately be 
eligible to draw benefits in either Class 1, 2 or 3, as the case may be, subject to 
conditions (d) and (e) below. 

(d) That the need of assistance either by the workman himself, or, in case of 
his death, by his dependents, be shown to the satisfaction of the executive com- 
mittee. 

(e) That the continued dependence of the beneficiaries be shown at any time the 
executive committee may request such proof. 

(/) That formal application for compensation be made on blanks to be furnished 
by the Manufacturers Association of Flint. 

Please note that there are no fees to pay and no disagreeable conditions to be 
met. 

For the purpose of this plan, workmen enjoying compensation thereunder will 
be classified under three heads, to be known as Class 1, Class 2 and Class 3. 

C J ass 1 . — Single man (or woman) or married man (or woman) with no dependent 
children. 

Under this class the dependents are wife (or husband), parents, brothers and 
sisters, as the case may be. 

Class 2. — Married man (or woman) with one dependent child under fifteen 
years of age (or over fifteen years of age if physically or mentally incapacitated 
for earning). 

Under this class the dependents include the dependent child in addition to those 
enumerated under Class 1. 

Class 3. — Married man (or woman) with two or more dependent children under 
fifteen years of age (or over fifteen years of age if physically or mentally incapacitated 
for earning). 



216 SOCIAL INSURANCE. [Feb. 

Under this class the dependents include the dependent children in addition to 
those enumerated under Class 1. 

The maximum amount of compensation to be paid each class will be as follows: — 

For death, or for total disability from sickness from causes covered by certificate 
of the Flint Vehicle Factories' Mutual Benefit Association during a period which 
cannot exceed one hundred and four weeks: Class 1, $7; Class 2, $8; Class 3, $9 
per week. 

Note. — Maximum compensation, both as regards amount paid and time limit 
of payment, will be paid in exceptional cases only, as our intention is simply to 
relieve suffering and distress temporarily, not to provide support for two years or 
any part thereof. 

For partial disability from sickness from causes covered by certificate of the 
Flint Vehicle Factories' Mutual Benefit Association: Such payments will be 
made as seems fair in each individual case. 

In order that the supplementary compensation plan, as it is called, may accom- 
plish the good intended, we will need the active co-operation of the entire member- 
ship of the Flint Vehicle Factories' Mutual Benefit Association; and as the 
conditions imposed, in order that your members may avail themselves of these 
benefits, are not at all arduous, we feel sure that you will do all you can to bring 
the workings of this plan to the attention of each and every factory employee, 
that they and their families may be eligible to relief in case prolonged illness or 
death visits them. 

Nearly four years have passed since the supplementary compensation plan was 
first put in operation, and over $30,000 have been spent to relieve suffering and 
want, and 68 of our employees and their families have been aided. 



METHOD OF ADMINISTRATION OF THE RELIEF DEPARTMENT 
OF A LARGE PITTSBURGH MANUFACTURING PLANT MAKING 
ELECTRICAL APPARATUS. 

The "relief department" is a department of the company's service in executive 
charge of a superintendent, whose directions in carrying out its regulations are 
complied with, subject to control of the president, except in such matters as are 
under control of the advisory committee. 

The object of the department is to administer a trust fund known as "the relief 
fund" for the payment of benefits to employees contributing thereto who are 
known as members of the relief department, when under these regulations such 
benefits are awarded for total disability due to causes other than accident occurring 
while performing duties as an employee of the company, and for the payments of 
benefits to their dependents, next of kin or beneficiaries designated by them, 
with the approval of the superintendent, when under these regulations such benefits 
are awarded on account of death due to causes other than such accident; also to 
perform such other duties and functions as are prescribed in these regulations or 
may be imposed by the board of directors. 

The "relief fund" consists of contributions from members, income derived from 
investments and from interest paid by the company, and appropriations, advances 
or gratuities by the company or others. 

The moneys received for the relief fund are held by the company in trust for the 
members of the department and their dependents, next of kin or other beneficiaries, 
to whom benefits have been or shall be awarded against such fund. 

The company, being the trustee of the relief fund, any part of the fund may be 
invested by the treasurer in such securities as are approved by the president and 
executive committee, and are in the name of the company "in trust for the relief 
fund." 

If the amount contributed by the members of the relief department, with interest 



1917.] HOUSE — No. 1850. 217 

and other income, is not sufficient to pay the benefits as they become due, the com- 
pany advances from its own treasury whatever sums may be necessary for this 
purpose, reimbursing itself, with interest at 3 per cent, per annum, when the con- 
tributions of members and other income are sufficient therefor. 

If at any time there is a surplus after making due allowance for liabilities over 
and above what is required to provide for the full and prompt payment of all 
benefits and a reasonable contingent fund, such surplus is applied to increase the 
benefits to members in such manner as is determined, upon advice of an actuary, 
by a vote of two-thirds of the committee, approved by the company. 

The condition of the account books and the relief fund at the close of each fiscal 
year is, on behalf of the members, audited and reported upon by a competent 
person or persons selected for that purpose by the committee who represent the 
members of the relief department, and the company's auditor makes an independent 
audit on behalf of the company. 

The company has general charge of the department; provides for the fulfilment 
of its obligations; has the custody of all moneys and assets belonging to the relief 
fund, and is responsible for their safekeeping and investment; pays into the fund 
interest at the rate of 4 per cent, per annum on monthly balances in its hands and 
all interest or other earnings derived from investment of moneys of the fund; 
supplies the necessary facilities for conducting the business of the department; 
and pays all operating expenses thereof. 

The president appoints a superintendent, who has charge of all business per- 
taining to the department. He employs such clerks and other assistants, subject 
to approval of the president, as are necessary, prescribes the forms and blanks to 
be used, certifies all bills and pay rolls of the department, signs all warrants for 
payment of benefits and other authorized expenses, furnishes the committee such 
reports as they may require, decides all questions properly referred to him, and 
exercises such other authority as is conferred upon him by the president or by the 
committee. 

There is a medical director and one or more medical examiners or other medical 
officers. The medical director is subject to the control and approval of the 
superintendent, and has general supervision of the medical and surgical affairs of 
the department. 

The medical director and medical examiners or other medical officers make the 
required physical examinations of applicants for membership ; report the condition 
of sick and injured members; determine when members are disabled and the cause 
and extent of disability, and report when they are able to work; pass upon proof 
of the fact and cause of death; and perform such other duties as are required by 
the superintendent. 

The medical director and medical examiners, or other medical officers as such, 
render professional service only in their respective offices, and do not accept fees 
or other remuneration for such or other service under these regulations under any 
circumstances. 

Note. — The company does not undertake to furnish free medical treatment, 
but in case of sickness while on duty, renders first aid, and in case of accident while 
on duty, in addition, furnishes such other medical and surgical treatment as is set 
forth under the company's accident compensation plan. 

There is an advisory committee of eighteen members and a chairman, all of whom 
to be eligible must be members of the relief department, constituted as follows: — 

The president of the company is ex officio a member and chairman of the com- 
mittee. 

The other members of the committee are chosen annually in December to serve 
one year from the first day of January next succeeding, or until their successors 
are chosen, as follows : — 

One-half is appointed by the president and one-half elected by the employees, 
who are members of the relief department, from among themselves, on the basis 



218 SOCIAL INSURANCE. [Feb. 

of membership in the different subdivisions, as provided in the following regu- 
lations: — 

The members of the committee chosen by members of the relief department are 
elected by ballot, one member to be elected from each of seven subdivisions of the 
shops and offices known as "election districts." Such districts are apportioned 
and rearranged annually according to membership in the relief department, and 
are duly announced by bulletin notices a reasonable time before each annual elec- 
tion. The ballots are taken and the count certified under oath by tellers. The 
member receiving the greatest number of legal ballots in and from his individual 
district shall be declared elected. 

The tellers are elected by the elected members of the advisory committee, but 
no member of the relief department known to be a candidate for membership on 
the advisory committee, nor any member of the advisory committee, is eligible 
for an appointment as teller. 

No officer, foreman, assistant foreman, inspector or boss of the company is 
eligible for election to represent the members. 

In balloting for members of the committee each member of the relief committee 
in good standing is entitled to cast one vote, but no voting by proxy is permitted. 
In event of the termination of service of any member of the committee, or of his 
withdrawal from or loss of membership in the relief department, or of his employ- 
ment by the committee in the capacity making him ineligible for membership on 
the committee, his membership on the committee thereupon terminates. 

A vacancy among the elected members is filled by the succession to the position 
of the employee who received the next number of votes of members of the same 
district from which the retiring member was elected at the last election, and, in 
default of any such person, the majority of the members of the advisory committee 
elected by the members fills the vacancy by electing a member from the same 
district as the retiring member. 

A vacancy among the members chosen to represent the company is filled by 
appointment by the president. 

The superintendent is ex officio secretary of the committee, but is not a member 
thereof. 

The committee has general supervision of the operations of the department, and 
sees that they are conducted in accordance with the regulations. 

The committee holds stated meetings once in three months at such time and 
place as the chairman determines, and meets at other times at the call of the chair- 
man. A quorum of the advisory committee consists of five members who have 
been elected to represent the members, and five who represent the company. 

It is the duty of the chairman to call special meetings of the committee upon 
the written request of five members thereof. 

Amendments to these regulations are proposed at any meeting of the com- 
mittee by any member thereof, and are acted upon at any subsequent meeting, a 
majority of the whole committee being necessary to pass the same. 

No amendments take effect until approved by the board of directors and pro- 
mulgated by the superintendent; when so made, approved and promulgated an 
amendment binds the company, all members of the relief department and all 
persons claiming benefits on account of disability or death incurred after the date 
specified in the promulgation of the same. 

Membership in the relief department is confined to employees of the company 
residing in the United States, excluding Alaska and other outlying territory, and 
is based upon an application in the following form : — 

To the Superintendent of the Relief Department. 

I of 

in the county of and the State of 

'. now employed by the company, do 



1917.] HOUSE — No. 1850. 219 

hereby apply for membership in the relief department of said company, and consent 
and agree to be bound by the regulations of said relief department, which regula- 
tions I have read or have had read to me, and by any and all amendments thereto 
and by any other regulations of said department hereafter adopted and in force 
during my membership. 

Unless I shall hereafter otherwise designate in writing, with the approval of the 
superintendent of the relief department, a beneficiary, any death benefits payable 

in a lump sum shall be paj^able to my wife (or husband) (name in full) 

provided I have given 

written notice of my marriage to the superintendent of the relief department; or 
if I leave no wife (or husband) me surviving, then to my children collectively, 
each to be entitled to an equal share; or if there be no such children living, then 

to (name in full) of 

if living, and if not living, then to 

my father and mother jointly or to the survivor; or, if neither be living, then to 
my next of kin, payment in behalf of such next of kin to be made to my legal repre- 
sentatives; or, if there be no such next of kin, the death benefits shall lapse and 
the amount thereof shall remain as a part of the relief fund without claim for the 
same. / 

I certify that I am. years of age, correct and temperate in my habits, 

that as far as I am aware I am now in good health, and have no injury or disease, 
constitutional or otherwise, except as shown on the accompanying statement made 
by me to the medical officer, which statement shall constitute a part of this applica- 
tion. 

In witness whereof, I have signed these presents at 

in the county of State 

of this day of 

A.D. 191 . . . . , this application to take 

effect at once, or on such subsequent dates as may be designated by said superin- 
tendent: provided, however, that if I shall become disabled before said date, and 
continue disabled beyond said date, this application shall not take effect until 
the first day after my recovery. 



Signature of Applicant. 

Check or Pass No Section or Department 

Witness ■. 

The foregoing application is approved at the office of the superintendent at 

in the county of 

State of this day 

of A.D. 191 

Signed 

Superintendent of Relief Department. 

The last application in the foregoing form which is made by an employee is 
known as his principal application. 

Upon approval of the principal application by the superintendent the applicant 
is a member on and from the date specified in such approval, and the superintendent 
issues to him a certificate of membership attached to a copy of the regulations 
then in force. 

The applicant is required to answer any questions that may be put to him by 
the medical examiner or the medical director concerning his physical condition and 
family history, and if he makes any untrue answer thereto, or conceals any facts 
from the said medical examiner or medical director, or attempts to defraud or 
impose upon the relief department, or make any untrue statement either verbally 
or in his application, he forfeits his membership in the relief department and all 
benefits, rights or equities arising therefrom. 



220 SOCIAL INSURANCE. [Feb. 

If an applicant for membership has a physical defect which would preclude the 
approval of his application if presented unconditionally, his application may 
nevertheless be approved, provided that he execute an agreement in writing satis- 
factory to the superintendent, to the effect that he shall not be entitled under his 
membership to any benefits for disability caused by, arising from, or growing out 
of such defects; such agreement is attached to and made part of said application, 
and such modification of the foregoing prescribed form of principal application is 
hereby authorized. 

If an employee entitled to become a member upon passing a satisfactory physical 
examination, and who has not previously been examined and rejected, has executed 
a prescribed form of "preliminary application," but has not had an opportunity 
to be examined before the date specified thereon for his application to take effect, 
he is protected by such preliminary application under and in accordance with the 
terms of the prescribed form of principal application from said date until he has 
had opportunity to be examined: provided, however, that he is only entitled to 
benefits payable on account of injuries or death caused solely by accident occurring 
while off duty, and if his principal application is not approved his rights and obliga- 
tions in the relief department cease from the time of physical examination; and 
if he refuses or neglects to be examined when opportunity for examination is offered, 
his rights and obligations in the relief department thereupon cease. 

An applicant protected in accordance with the foregoing against accident only, 
contributes at half rate while so protected. 

No applicant is admitted at an age beyond fifty years or without a physical 
examination. 

Every member of the relief department must enter the class corresponding to 
his regular wage or salary, in order to be entitled to the benefits thereof and to be 
eligible to enjoy for himself and his family the privileges and benefits of the service 
pensions. The class of every member is determined by the superintendent. 

An employee upon joining the relief department must enter the class to which 
his salary or wages makes him eligible, omitting overtime and occasional loss of 
time; further change in class is only made at the request of the member himself, 
and then but to the class his salary or wages shall at such subsequent time 
entitle him to belong. There are six classes of members, as follows : — 



Monthly Pay. 



Class. 



Less than $30, 

$30 or more, but less than $45, 
$45 or more, but less than $60, 
$60 or more, but less than $75, 
$75 or more, but less than $95, 
$95 or more, 



Half rate. 

First. 

Second. 

Third. 

Fourth. 

Fifth. 



No employee is required to become a member of the relief department; but only 
members of .the relief department are eligible for service pensions. 

In case of claim for benefits the class of the member is determined by the con- 
tribution made by or for him immediately prior to disability or death. 

An employee cannot remain a member in a class other than that allowed by his 
pay. 

The superintendent is authorized to change the class and contribution of a 
member when his wages or salary call for it. If a member declines to permit such 
change his membership terminates. 



1917.] HOUSE — Xo. 1850. 221 

A member may withdraw from the relief department at the end of any month 
upon giving written notice to the superintendent before the fifteenth day of that 
month on the prescribed form of withdrawal notice, copy of which is furnished 
on request. 

The membership of an employee guilty of habitual or frequent drunkenness, 
disreputable or publicly unlawful conduct, may be terminated at any time. 

A member whose furlough is suspended, or who is otherwise temporarily relieved 
from the service for a specified time not to exceed two months, may retain his 
membership during such absence, subject to approval of the superintendent, by 
paying his contributions as they fall due. His foreman or head of department 
notifies the superintendent at the beginning of such absence, specifying the time 
set for return to duty, and if at that time the member does not return to duty 
his membership in the relief department thereupon terminates, unless otherwise 
previously arranged by him with the superintendent. 

When a member leaves the service of the company for any cause whatever, 
his membership in the relief department terminates, and he is not entitled to any 
benefits for time thereafter, except such as he may be entitled to by reason of dis- 
ability beginning and reported before and continuing without interruption to and 
after such termination of employment. 

A member absenting himself from duty for a period of six days without per- 
mission of his employing officer previously obtained, or without giving, meanwhile, 
reasons for absence satisfactory to his foreman or head of his department, is held to 
have left the service, and his membership is held to have terminated on the day 
preceding such absence. If such member is reinstated in the service he is also 
reinstated in membership upon approval of the superintendent. 

A member relieved from the service and afterwards re-employed may again 
become a member of the relief department, although then over fifty years of age, 
upon application at the time of employment, upon passing a satisfactory physical 
examination in which his physical condition at the termination of former employ- 
ment is given due consideration, and upon approval of his application by the 
superintendent. 

When a member is in arrears for two months his membership thereupon ter- 
minates. 

A member resuming work for the company before he has been in arrears two 
months is protected from the time of resuming work, subject to the approval of 
the medical director and the superintendent, and the arrears are paid on the next 
pay roll. 

Members keep the superintendent of the relief department informed of their 
addresses and of any change therein. 

The word "contributions" wherever used in these regulations is held and con- 
strued to refer to such designated portions of wages or salary, payable by the com- 
pany to an employee, as is provided in these regulations, or that the company 
shall apply for the purpose of securing the benefits of the relief fund, or to such 
cash payments as it may be necessary for a member to make for said purpose, or 
donations by the company to the relief fund. 

Contributions are made by members monthly at the following rates, and continue 
to be paid during disability : — 

Half rate, wages less than $30 per month, .... 

First class, wages 30 or more, but less than $45 per month, 
Second class, wages S45 or more, but less than $60 per month, 
Third class, wages $60 or more, but less than $75 per month, 
Fourth class, wages $75 or more, but less than $95 per month, 
Fifth class, wages $95 or more per month, .... 

The amount of the average monthly wages or salary is determined by the superin- 
tendent, subject to review by the advisory committee. 





$0.25 




.50 


•• 


.75 

1.00 




1.25 


v thp 5= 


1.50 
imprin- 



222 SOCIAL INSURANCE. [Feb. 

Contributions for each month are due on the first day of that month, but are 
ordinarily deducted from the member's wages or salary on the first pay roll of 
the following month; or if not then deducted are paid to the superintendent. 

If deduction of a member's contribution from his wages or salary is omitted from 
the pay roll in error, the fact that such deduction has not been made does not 
debar him or his beneficiary from benefits to which they would otherwise be entitled; 
but such deduction is made from wages or salary payable thereafter. 

When a member has no wages or salary on the pay roll, any contribution due 
from him must be paid in cash in advance to the superintendent; otherwise he is 
in arrears. 

No member falls in arrears for contributions while drawing benefits from the 
relief fund for disability, provided he has fully complied with the regulations 
during his disability. A sufficient amount may be withheld from benefits to pro- 
tect dues for one month in advance during continuance of disability for which 
benefits are payable, provided an insufficient amount is due the member on the 
company pay roll. 

In determining the contribution for a part of a month the amount for each day 
is one-thirtieth of the amount for one month, and the amount for any other part 
of a month is determined by multiplying the amount for one day by the number 
of days in such part, adding to make even cents when fractions occur. 

In* determining the number of days in the part of a month for which contri- 
bution is collected, the actual calendar days are computed, beginning on the day 
on which the application takes effect. When a member's service terminates there 
is due him as a refund any excess of contribution he has made above what is neces- 
.sary to adjust his accounts to, — not including the last day of service, — but no 
refund is due on the death of a member. 

Any refund of contributions due a member is payable on application therefor 
by such person, if made within twelve months after termination of membership 
upon the surrender of membership certificate; if not claimed within such period 
it reverts to the relief fund. 

Wherever used in these regulations the word "disability" is held to mean physical 
inability to work, by reason of sickness or accidental injury, while not performing 
duties as an employee of the company, and the word "disabled" applies to members 
thus physically unable to work; the decision as to when members are disabled, 
the cause and extent thereof, and as to when they are able to work, rests with the 
medical officer, subject to review by the superintendent and the committee. 

Whether disability at any time shall be classified as due to accident occurring 
while not performing duties as an employee of this company or to other causes is 
passed upon by the medical officer, who transmits the same with his recommenda- 
tions to the superintendent, and, if he deem it necessary, transmits the same to 
the committee, determination by which is final. 

In considering the question of disability, subjective symptoms or alleged feeling 
are given due weight, but these in themselves, unsupported by objective and 
discoverable symptoms, do not entitle a member to be considered disabled. 

A member, becoming disabled, notifies the superintendent or his local repre- 
sentative immediately, or causes him to be notified. In reporting disability the 
member also gives his house- address. If he fails to give notice until he recovers 
he is not considered disabled before the day on which notice is given, unless he 
proves his disability before that day to the satisfaction of the superintendent 
and gives satisfactory reason for delay in giving notice. 

A member, becoming disabled, unless incapacitated therefor by his disability, 
reports immediately in person to the medical officer. If he is unable to do so he 
must advise the superintendent or his local representative in writing, informing 
him of the nature of the disability, and also stating the name and address of his 
attending physician, if any. It is also the duty of a disabled member, not confined 
to the house by disability, to report at the medical officer's office from time to 



1917.] HOUSE — No. 1850. 223 

time as requested, and to keep any other appointment made by that officer or the 
superintendent or his local representative. Members who avoid the medical 
officer, or neglect to report or keep appointments as herein provided, are not entitled 
to benefits. 

If a member who has been reported by the medical officer as able to work is not 
able to work on the day set, he immediately communicates with the medical officer, 
reporting to him in person if possible; otherwise, he is not considered disabled on or 
after the date set for his return to work. 

A member becoming disabled during definite suspension, furlough or other 
leave of absence, and while away from his usual place of residence when on duty, 
is not entitled to benefits unless, in addition to reporting his disability immediately 
as required by the regulations, he proves his disability while absent to the satis- 
faction of the superintendent or his local representative. 

A disabled member, desiring to absent himself for any length of time from his 
usual place of residence when on duty, first sees the superintendent or his local 
representative and medical officer, and obtains approval of absence for a specified 
time; he furnishes to the medical officer satisfactory certificates of disability 
during absence, keeps him informed of his address and reports to him immediately 
on his return. If such disabled member goes away and remains away without 
previously consulting the superintendent or the medical officer and obtaining 
approval of absence for a specified time, or overstays his leave, he is not entitled to 
benefits for any time of absence unless he proves his disability while absent to the 
satisfaction of the superintendent, and gives satisfactory reason for failure to consult 
the medical officer before leaving. 

After a member has sufficiently recovered from a disability, for which benefits 
or compensation have been paid, to resume work, he is restored to full membership 
if he is immediately re-employed by the company. 

A member is entitled to receive from the relief fund benefits continuously after 
the first week during any total disability due to sickness; he is likewise entitled 
to receive benefits from the first day during any total disability due to accident 
occurring while off duty; in neither qase, however, are benefits paid beyond the 
day when such disabled employee is awarded a service pension by the company. 

A member is not entitled to benefits from any cause while totally disabled from 
a preceding cause and receiving benefits therefor. 

While wages or salary are received from any source whatsoever during disability, 
a member is not considered totally disabled within the meaning of that term as 
employed in these regulations, and no benefits for total disability are paid : provided, 
that after the fact of such total disability is established, the earning of less than 
one-sixth his full wages or salary is not deemed to terminate such total disability. 

Should a disabled member under the regulations be unable or otherwise decline 
to accept benefits he does not thereafter make contribution. If such member 
afterwards accept the benefits to which he is entitled, a proper adjustment of 
contribution is made. 

In any case of grave injury or chronic sickness, where the member desires to 
accept a lump sum in lieu of the benefits which might become due to him or on 
his account, and in full of all obligations of the department arising from his member- 
ship, the superintendent has authority to recommend full and final settlement with 
such member for such amount and on such terms as may be agreed upon in writing. 
All such proposed settlements are based upon computation of commuted value 
of the benefits by an actuary, and are not effective until approved by the committee 
after ten days' written notice setting forth in detail what the benefits are, the 
proposed commutation and the reason therefor. 

The time of disability is considered as beginning upon the first day upon which 
no wages or salary, or less than one-half day's wages or salary, are paid because of 
disability, and this day is called "first day wages not paid." 

Benefits are paid in conformity with financial methods of the department, and 



224 SOCIAL INSURANCE. [Feb. 

on warrants drawn by the superintendent or assistant superintendent upon his 
receiving satisfactory certificates respecting the claim and such releases as are 
required by him. 

Benefits on account of continued disability are payable monthly. Benefits for 
short periods of disability are paid as soon as the amounts due can be ascertained 
after return to duty. 

Benefits payable on account of the disability of a member are payable only to 
such member, or in accordance with his written order when approved by the super- 
intendent, or to his legal representative. 

When, in the opinion of the medical director, a disabled member is mentally 
incompetent, disability benefits due him may, at the direction of the superintendent, 
be paid to his wife or to some other member of his family, or to some other person 
in law charged with or in fact assuming his care and custody, for the use and benefit 
of the member, and such payment bars any subsequent claim on the part of the 
member or his legal representative for the amounts so paid. 

Benefits are not paid for disability to a member directly, indirectly or partly 
due to his intoxication or to his use of alcoholic liquors as a beverage, or to his 
immoderate use of stimulants or narcotics, or to his unlawful acts or immoralities, 
or to venereal diseases (syphilis, gonorrhea, chancroids), however contracted, or 
their complications (orchitis, epididymitis, stricture or bubo) ; or for his disability 
from fighting (unless in self-defense against unprovoked assault), or from injury 
received in a liquor saloon, gambling or any disreputable resort. During disability 
classed as non-beneficial under this regulation, members who keep the superintend- 
ent informed of their addresses, and furnish him monthly satisfactory evidence of 
continued disability, retain title to death benefits; otherwise their membership 
is held to have terminated. 

Benefits are not paid for disability beginning or death occurring while a member 
is in arrears. 

A member is not entitled to benefits if he declines to permit the medical officer 
to make or to have made by any other physician such examination as he deems 
necessary to ascertain his condition. 

A disabled member must take proper care of himself and have suitable medical 
or surgical treatment. The payment of benefits is discontinued if he refuses or 
neglects to comply with the recommendations of the officers of the relief depart- 
ment as to proper care and treatment. 

Claim for disability benefits is made within thirty days after they accrue, and 
claim for death benefits is made within one year after death. 

To establish a claim for disability benefits the case must be reported immediately 
to the relief department. In case of accident there must be positive and visible 
external evidence of physical injury sufficient to cause disability. In case of .sick- 
ness there must be positive evidence of acute or constitutional disease sufficient to 
cause disability, and, whenever possible, the sick or injured member must call at 
once or as soon as practicable thereafter at the medical officer's office for examina- 
tion. 

A person claiming benefits for time after termination of service is not entitled to 
such for a disability arising from any cause occurring after such termination, nor 
in any case unless directly due to a cause which arose out of the disability existing 
at the time of such termination. 

Pending determination whether disability at any time shall be classed as due to 
accident occurring while not performing duties as an employee of the company, or 
to other causes, benefits are paid from the relief fund, and if upon final determina- 
tion any sum or sums shall prove thus to have been paid from the relief fund which 
should have been paid by the company, the latter shall reimburse the relief fund. 

In case of alleged sprain, strain, wrench and the like, where external physical 
proof of disabling injury is lacking, the member must establish substantial history 



1917.] 



HOUSE — No. 1850. 



225 



satisfactory to the medical officer of violence accidentally inflicted sufficient and 
liable to cause disabling injury. 

When a member meets with an accident from which disability may result, and 
on account of which he wishes to reserve the right to claim disability benefits, he 
reports the accident immediately upon its occurrence, and in person, if possible, 
to the medical officer. 

The payment by the company of any amount in compromise of a claim for 
damages or compensation arising from or growing out of an injury to, or the sick- 
ness or death of, a member bars any and all claims for benefits from the relief fund. 

No member is entitled to benefits for sickness, nor are death benefits payable 
for death resulting from sickness if said disability begins less than thirty days after 
date of formal acceptance as a member. 

Benefits are paid for each calendar week and fractional parts thereof pro rata, 
except for the first week of total disability, during the continuance of such total 
disability, but not beyond the day when the disabled member is awarded a service 
pension at the following rates: — 



To a half-rate member, 
To a member of the first class, 
To a member of the second class, 
To a member of the third class, 
To a member of the fourth class, 
To a member of the fifth class, 



Per Week. 


$2 


75 


5 


50 


8 


25 


11 


00 


13 


75 


. 16 


50 



Provided that no benefits are paid for any period in which such member is in 
receipt of wages or salary. 

Disability resulting from infection of a cut, abrasion, scratch, puncture or other 
wound, or from any injury not immediately disabling or not reported at the time of 
the occurrence of the accident causing injury, or from poison however taken into 
or acting upon the body, or from any overdose of medicine or drug, or from surgical 
operation necessary for removal of some defect which would otherwise probably 
produce disability, or from sunstroke or frostbite, shall be classed as due to sickness. 

In case of relapse in sickness, disability occurring within two weeks, the first 
seven days are not deducted in computing time of sick benefits. 

Payment upon the death of a member is made of a sum to be determined according 
to the class of the member, as follows: — 



Members half rate, 
Members of first class, 
Members of second class, 
Members of third class, . 
Members of fourth class, 
Members of the fifth class, 



$50 

100 
125 
150 
150 
150 



The company voluntarily and as a free gift contributes an amount equal to that 
paid, as above, by the relief department in the event of death. The company, 
however, reserves the right to discontinue such voluntary contribution at any time 
it may deem advisable. 

Death benefits are not paid in case of death due directly or indirectly to unlawful 
acts of the diseased member or at the hands of justice. 

Death benefits or any unpaid disability benefits are payable to the beneficiary 
upon proof of claim and execution and delivery of the necessary releases. 

A part or all of the death benefits, but not exceeding $100, is, at the discretion 
of the superintendent, paid before final settlement to meet funeral or other urgent 
expenses incident to the death of a member. 



226 SOCIAL INSURANCE. [Feb. 

No employee of the company, except authorized department officials, has au- 
thority to contract any bills against the department, and nothing herein is held to 
mean or imply that the department is responsible for the payment of such bills as 
any other employee of the company may contract or his physician or surgeon may 
charge. 

In any controversy, claim, demand, suit at law, or other proceeding between 
any member, his beneficiary or legal representative and the company or the relief 
department, the certificate of the superintendent as to any facts appearing in the 
records of the relief department or of the company, or his statement that any 
writing is a copy taken from said records, or of any instrument on file in said de- 
partment or with the company, or that any action has or has not been taken by 
the committee or board of directors, is prima facie evidence of the existence of such 
records and their accuracy, and of all the facts therein stated. 

All questions or controversies of whatsoever character arising in any manner 
or between any parties or persons in connection with the relief department or the 
operation thereof, as to any claim for benefits preferred by any member or his 
legal representative or his beneficiary or any other person, or as to the construction 
of language or meaning of the regulations, or as to any writing, decision, instructions 
or acts in connection with the operation of the department, is submitted to the 
superintendent, whose decision is final unless an appeal is taken to the committee 
within thirty days after notice of such decision is given to the parties interested. 

When an appeal is taken to the committee it is heard by said committee at their 
next meeting, or at such future meeting as they may designate, provided five days' 
notice of said meeting be given to the appellant, and is determined by a vote of a 
majority of the quorum, or any other number not less than a quorum, of the members 
present at such meeting, and the decision reached by the committee is final, except 
that it is reviewable by a court of competent jurisdiction, by an action brought 
within thirty days after notice of the decision of the committee has been given to 
the appellant or mailed to him at his last known post-office address, as to the 
right of any party to recover a benefit. 

The action of the board of directors in establishing the relief department, in 
adopting these regulations, and in making contributions is not held to create a 
contract between the company and any employee or other persons, or vest in him 
or any of them any interest prior to or other than an actual award of benefits, or 
to confer upon any such employee a right to be retained in the service of the com 
pany, or to oblige the company to continue the relief department or the relief 
fund by making further contributions thereto for the benefit of persons other than 
those to whom benefits have been awarded: provided, that no such discontinuance 
affects the company's liability as regards benefits awarded except that the com- 
pany may at any time be released from further disability thereunder by — 

(a) Nominating by and with the approval of the judge of. a court of record of 

County. 

State of of competent jurisdiction, a trustee 

for the relief fund, to hold and administer the same as herein provided for the 
benefits of all persons to whom benefits are awarded, and transfer to such trustee 
funds and securities at least in value to all benefits awarded and then in force as' 

determined by the actuary of the State insurance department of 

or — 

(b) Purchasing annuities for all persons to whom such benefits are awarded and 
are then in force for amounts equal to such benefits and payable for the same 
respective terms from a life insurance company licensed to do business in the 
State. 

In either of such cases the remainder of the relief fund, and in any case when 
valuation discloses a surplus of that fund over all requirements, the surplus of the 
relief fund, is distributed equitably among its then members. 



1917.] 



HOUSE — No. 1850. 



227 



Summary of Relief Department. Classes, Dues and Benefits. 




Classes. 


Monthly Wages. 


Monthly 
Dues. 


Weekly 
Disability. 


Benefits 
(Death). » 


Half Rate 

1st 

2nd 

3rd 

4th 

5th, 


Less than $30, 
$30 to $45, . 
$45 to $60, . 
$60 to $75, . 
$75 to $95, . 
$95 and over, 


$0 25 

50 

75 

1 00 

1 25 

1 50 


$2 75 
5 50 
8 25 
11 00 
13 75 
16 50 


$50 
100 
125 
150 
150 
150 



Financial Statement for Seventh Fiscal Year, ending Dec. 31, 1913. 

Receipts. 



Balance Jan. 1, 1913, . 

Contributions from members, 

Interest on surplus in treasurer's hands, 



Disbursements. 



Sick benefits, 
Accident benefits, 
Death benefits, . 



As provided for in the regulations, Rule No. 4, the company paid 
all operating expenses, as follows : — • 
Salaries, supplies and other necessaries, . . . 

Duplication of death benefits, ....... 

Total, 



$73,161 83 

49,649 87 

3,134 95 

$125,946 65 

$24,901 77 
16,654 60 

2,825 00 

$125,946 65 



$15,778 59 
2,825 00 

$18,603 59 



It is worth while to compare the following financial statement of a 
small employees' benefit association which has only one-fourth as many 
members as the one just referred to having plants in several States : — 



EMPLOYEES* BENEFIT ASSOCIATION OF A CERTAIN TYPE. 
Balance Sheet, Dec. 31, 1915. 



$9,875 00 



Investment in bonds (at cost) : — 

$10,000 (par value) City of Omaha Waterworks 4£% gold bonds, . 

$5,000 (par value), Pittsburgh, Cincinnati, Chicago & St. Louis 
Ry. Co. 4|% consolidated gold bonds, series 1, 

$10,000 (par value) Chicago, Milwaukee & St. Paul Ry. Co. refund- 
ing mortgage gold bonds, series A, . 



5,056 25 



9,650 00 

$24,581 25 



1 The company voluntarily and as a free gift contributes an amount equal to that paid as 
above, by the relief department, in the event of death. The company, however, reserves the 
right to discontinue such voluntary contributions at any time it may deem advisable. 



228 



SOCIAL INSURANCE. 



[Feb. 



Cash: — 

In bank, $32,361 06 

In hands of American Steel Foundries (contributions for 
the last half of December, 1915, deducted from wages 
due employees) , ....... 2.403 15 



Accrued interest on bonds, 



Liabilities. 



Benefits due, not paid : — 
Death: — 
Sickness, 
Accident, 

Total death benefits, 
Sickness, 
Accident, 



Total benefits due — not paid, 
Doubtful benefit claims made but not yet allowed: — 
Death: — 
Sickness, 
Accident, 

Total death benefits, . 
Sickness, 
Accident, 
Loss of eyesight, 

Total doubtful benefits, 
Surplus : — 

As per balance sheet of Dec. 31, 1914, 

Net income for the year 1915, per income and expend- 
iture account, ....... 



$6,590 00 
1,611 50 



$8,201 50 

1,554 43 

87 10 



$1,680 00 
2,780 00 



$4,460 00 

584 10 

45 60 

390 00 



$36,385 76 



8,068 22 



$34,764 21 
431 25 

$59,776 71 



$9,843 03 



5,479 70 



44,453 98 
$59,776 71 



EMPLOYEES' BENEFIT ASSOCIATION IN , A COMPANY HAVING 
PLANTS IN SEVERAL DIFFERENT STATES. 

Statement of Operations for the Year 1915. 
Revenue : — 
Contributions by members, ..... 



Intei est on cash balances, etc., 

Expenditures* — 
Benefits allowed, 
Death claims due to sickness. 
Death claims due to accident, 
Death benefits only, 

Disability claims due to sickness, 
Disability claims due to accident, 

Special benefit claims, . 



$89,787 40 
11,400 81 
31,959 40 

$95,205 60 
11,271 85 



$286,409 65 
21,747 07 



$133,147 61 



$106,477 45 
1,520 65 

$241,145 71 



$308,156 72 



1917.1 



HOUSE — No. 1850. 



229 



Administration expense: - 
Salaries, 

Printing and stationery, 
Traveling expenses, 
Office furniture and fixtures, 
Miscellaneous, 



Medical examiners : — 
Salaries and expenses, . 
Hospital and medical, . 
Auo torn obile maintenance, 



$15,691 43 




1,413 97 




51 93 




167 18 




1,492 12 

» 




$18,816 63 




18,969 46 




8,206 99 




142 98 






$46,136 06 






$287,281 77 



Net income from operations, ....... $20,874 95 

Contribution of International Harvester Companies, . . . 50,000 00 
Balance available for disability and mortality fluctuations Dec. 31, 

1914 416,226 49 



Deduct increase in reserve for impaired risks, 



$487,101 44 
150,000 00 



Balance available for disability and mortality fluctuations Dec. 31, 

1915 $337,101 44 



Financial Statement Dec. 31, 1915. 
Assets. 



Investments: — 
Bonds, .... 
Farm loans, . 

Accrued interest on investments, 
Cash, . 



Liabilities. 

Death claims pending settlement, . 

Accounts payable, ...... 

Reserve for payment of benefits for disabilities occur- 
ring prior to and continuing after Jan. 1, 1916, 
Reserve for impaired risks, . 



$135,970 00 
44,000 00 



$179,970 00 

2,462 49 

436,508 76 

$618,941 25 



$25,221 57 
6,618 24 

50,000 00 
200,000 00 



$281, 



SI 



Balance available for disability and mortality fluctuations, Dec. 31, 

1915 337,101 44 



$618,941 25 



Death claims pending settlement: — 
5 beneficiaries unknown; no claims filed. 
27 awaiting proof of heirship, including 13 whose beneficiaries reside abroad. 
32 on which there is a liability of $25,221 57 



230 SOCIAL INSURANCE. [Feb. 

Accounts payable : — 
Disability and death benefits allowed, but not paid, as members and 
beneficiaries cannot be located, . . . $4,955 23 

Unclaimed checks, . . . . . . 456 36 

Miscellaneous, 1,206 65 

, $6,618 24 



Reserve for continuing benefits: — 
On Dec. 31, 1914, a reserve of $50,000 was provided to pay benefits to 
166 members disabled at that time, whose disability continued 
into 1915; also to pay benefits on claims made after Jan. 1, 1915, 
for disabilities occurring during 1914. The above amount was 
all used during 1915 for the purpose stated above. On Dec. 31, 
1915, 207 members were disabled on account of accident and 
sickness, and the association may reasonably anticipate that as 
large a sum will be required to meet these liabilities in 1916: 
therefore the amount of $50,000 is again provided to liquidate 

such liabilities, 50,000 00 

Reserve for impaired risks : — 
Balance Dec. 31, 1914, . . - . . . $50,000 00 

Add provision for 1915, 150,000 00 



200,000 00 

$281,839 81 

Sickness Disability Benefits. 

The total number of cases of sickness reported among the members of the associa- 
tion during 1915 was 1,931, of which number 1,849 drew sickness disability benefits. 
In the other 82 cases death occurred within seven days of the date of disability. 

The number of cases reported in 1914 but carried into 1915 was 155. Of the 
total number of 2,086 sickness cases, 150 died and 194 were still disabled Dec. 31, 
1915. 

The average length of disability due to sickness (not including the first seven 
days) was thirty-six days, and the average amount of each disability claim was 
$47.51. 

During the year 78 members drew sickness benefits for fifty- two weeks, 110 
members drew benefits for six months or more but less than twelve months, and 
92 members drew benefits for three months or more but less than six months. 

The total time paid for on account of sickness (exclusive of the first seven days) 
was 72,148 days. 

The sickness disability cases are in the proportion of 8.5 per 100 members. 

The average time paid for, distributed over the entire membership (22,755), was 
3.17 days per member. These figures do not take into consideration the first 
seven days of sickness disability for which no benefits were paid. 



Accident Disability Benefits. 

The total number of accident cases reported among the members of the associa- 
tion during 1915 was 471, of which number 463 drew accident disability benefits. 
In the other 8 cases death was immediate. The number of cases reported in 1914 
but carried Into 1915 was 11. Of the total number of 482 accident cases 12 died 
and 13 were still disabled Dec. 31, 1915. 

The average length of disability due to ail accidents was 15.5 days, and the 
average amount of each disability claim was $23.78. 

The total time paid for on account of accidents was 7,354 days. 



1917.] 



HOUSE — No. 1850. 



231 



Special Benefits. 
The following special benefit claims were allowed during the year 1915: 



Deering, loss of right eye, 
McCormick, loss of sight of both eyes, 
amputation of right foot, 



$355 65 
1,169 00 
1,080 00 

$2,604 65 



Death Benefits. 



The death rate due to sickness during the year, based on the average member- 
ship of 22,755, was 6.59 per 1,000 members. 

The death rate due to accidents during the year, based on the average member- 
ship of 22,755, was 5.27 per 10,000 members. 

The death rate from all causes during the year, based on the average member- 
ship of 22,755, was 7.12 per 1,000 members. 

Comparative Table. 



1911. 



1912. 



1913. 



1914. 



1915. 



Average membership, 

Percentage of employees in mem- 
bership. 

Percentage of membership in 
manufacturing plants. 

Number of sickness cases in the 
year. 

Average length of sickness dis- 
ability per case (days) . 

Average amount of sickness ben- 
efits per case. 

Sickness disability cases per 100 
members. 

Total days paid for on account of 
sickness. 

Number of accident cases in the 
year. 

Average length of disability on 

& account of accident, per case 

$ (days). 

Average amount of accident ben- 
efits per case. 

Total days paid for on account of 
accidents. 

Number of death claims paid and 
allowed. 

Death rate per 1,000 members, . 

Total benefits .... 

Total expenses 

Balance available for disability 
and mortality fluctuations. 



29,546 
75.1 
84.0 
3,550 
22.6 

$29 68 
12.1 

87,084 
643 
11.9 

S16.97 

7,983 

179 

6.66 

$265,265 03 

$41,364 86 

$241,859 36 



29,257 

74.8 

85.0 

3,553 

24.44 

$30 45 

12.3 

, 93,821 

676 

13.6 

S17.36 

9,432 

177 

5.47 

$263,562 70 

$47,240 60 

$326,940 48 



30,125 
75.7 
85.3 
3,700 
26.7 

$35 51 
12.5 

104,506 

725 

13.3 

$18.43 

9,770 

199 

6.54. 

$310,524 74 

$51,997 61 

$344,779 71 



24,878 

79.5 

90.9 

2,321 

33.89 

$43 90 

9.6 

86,286 

563 

13.6 

$18.90 

7,803 

163 

6.39 

$249,063 66 

$49,450 04 

$416,226 49 



22,755 
78.4 
89.0 
1,849 
36.0 

$47 51 
S.5 

72,148 
463 
15.5 

$23. 78 

7,354 

162 

7.12 

$241,145 71 

$46,136 06 

$337,101 44 



(a) The reduction of forces in the works due to the curtailment of export trade 
resulting from the war in Europe has materially affected the membership of the 
association, so that the average for the year 1915 was 22,755 as compared with 
24,878 for the year 1914. 

(b) Members who were laid off on account of the unusual situation were allowed 
to continue their memberships in full force during extended absence, as authorized 
by the board of trustees. 



232 



SOCIAL INSURANCE. 



[Feb. 



(c) The board of trustees carefully considered the subject of reserve fund for 
impaired risks, and believing the amount of $50,000 inadequate, unanimously 
voted to increase this reserve to $200,000, and to invest the fund in approved 
interest-bearing securities. 

The campaign against tuberculosis has been continued in co-operation with 
the companies. During the year 78 new cases were recorded, 56 of which received 
sanatorium care. The record of the 56 sanatorium cases is as follows: — 



Died at sanatorium, ..... 

Left sanatorium and died, .... 

Lump sum settlement, ..... 
Left sanatorium and drew fifty-two weeks' benefits, 
Recovered and returned to work, 
Still disabled at sanatorium, .... 
Left sanatorium, but still disabled, 



5 
4 
1 
5 

14 
20 

7 



56 

The record of the 22 cases which did not receive sanatorium care is as follows: — 



Died 

Lump sum settlements, 
Recovered and returned to work, 
Still disabled, .... 



22 
The following balance sheet of this association for the year 1915 is of interest: — 



Balance Sheet. 
Assets. 
It will be noted that there was invested in bonds $24,581.25, and there was at 
the credit of the association in the bank as of Dec. 31, 1915, $32,361.06, and that 
an additional sum of $2,403.15 was in the hands of the American Steel Foundries 
on that date. The latter amount represents contributions which were not col- 
lected at the time the account books of the association were closed. As soon as 
an accounting could be made by the company of these collections the money was 
turned over to the association and deposited to the credit of its account in the 
bank. 

Liabilities. 

The total liabilities of the association as of Dec. 31, 1915, were $15,322.73, as 
follows : — 

Benefits due, not paid, $9,843.03. This amount represents claims which had 
accrued for the second biweekly period of December, and were paid shortly after 
the 1st of January, 1916, together with a number of death claims, payment of 
which was withheld pending receipt of proper claim papers. 

Doubtful benefit claims made, but not yet allowed, $5,479.70. This item repre- 
sents the association's responsibility for several claims, payment of which had not 
been definitely decided. 

Surplus. 
Of the net income for the year the portion derived from contributions was 
$6,580.64, or 15.5 per cent, of the total contributions for the year, which compares 
with corresponding income for previous years or periods as follows : — 



1917.] 



HOUSE — No. 1850. 



233 



Percentage of Income to Contributions. 

Period, Sept. 1, 1911, to Dec. 31, 1915 
Year, Jan. 1, 1913, to Dec. 31, 1913, 
Year, Jan. 1, 1914, to Dec. 31, 1914, 
Year, Jan. 1, 1915, to Dec. 31, 1915, 
Average for total period, 



Per Cent. 
32.1 
18.0 
13.3 
15.5 
20.5 



The percentage of gain from contributions was slightly in excess of 1914, although 
the total of contributions for the year was less. This is accounted for by the fact 
that the average contribution per member was approximately 31 cents more than 
in 1914, and these receiving sick benefits were, on an average, members of lower 
class rating; also the amount of special benefits paid was about SI, 300 less than 
in the preceding year. 

General. 

The association's contribution rate contemplated 5 deaths per 1,000 members 
per year. The average rate during the present fiscal period was 7.26 deaths per 
year. 

The amount of the contribution charged for protection by the association was 
fixed on a probable absence from work by each member of four days per year in 
excess of the first weekly period. During the fiscal period covered by this report 
only 3.02 days per member were lost on account of disability. 

During the year 1915 the association paid benefits as follows: — 



Claims for sickness, 
Claims for accidents, 
Claims for death, 



456 
25 

27 



Total 

The average amount of each claim for sickness was 
The average amount of each claim for accident was 
The average amount of each claim for dea^h was 



508 

$29.80 

47.40 

780.00 



Company's Contribution. 

It may be of particular interest to know that during the twelve months ending 
Dec. 31, 1915, the company disbursed, on account of actual out-of-pocket expenses 
for managing the affairs of the association, $9,911.89. This amount does not include 
salaries of the employees of the accounting department, either at the Chicago 
office or at the plants, who have contributed largely to the work of the association; 
nor any charges for rent, stationery and many other miscellaneous expenses. 

If these items had been included the total expense to the company would have 
amounted to a much larger sum. 

Except for the sum of $78.36 for special expenses incurred in the interest of the 
association, possibly to avoid payment of large disability or death claims, all of 
the money disbursed and shown on the financial statement was spent on account 
of claims. 



The following tables show rates of contribution and benefits in two 
establishment funds, representing the only fundamental points of dif- 
ference as compared with the funds of associations already discussed: — 



234 



SOCIAL INSURANCE. 



[Feb. 



Schedule of Contributions and Benefits of the Employees' Benefit Associ- 
ation of about 5,000 Members. 

[Monthly earnings of members govern the highest class they may enter.] 



Num- 
ber op 
Class. 


3) 

fl 

'3 
3 
w 
>> 

3 

a 

£ 


b 

r2 

fi 
o 
O 

>> . 

2 2 
s fl 

5.9 
3 


fl* 

S S'S 

o o> a 
Q 


i 

w. 
■** 

ua 

8 

ffl 

Si 

o> fl 
Q 


Q 

2g 


o 

fl 
03 

W 

£S 
o^ 

o © 

03 fl 


03 

9 

o » 

fife 

l-i 


O 9 

H-) fl 

©o 

11 

£33 


GO •*> 

M is 

> M 
M 


1, . . 


120 00 


$0 30 


$0 40 


$240 


$480 


$240 


$480 


$120 


$480 


2 






25 00 


38 


50 


300 


600 


300 


600 


150 


600 


3 






30 00 


46 


60 


360 


720 


360 


720 


180 


720 


4 






35 00 


54 


70 


420 


840 


420 


840 


210 


840 


5 






40 00 


60 


80 


480 


960 


480 


960 


240 


960 


6 






45 00 


68 


90 


540 


1,080 


540 


1,080 


270 


1,080 


7 






50 00 


76 


1 00 


600 


1,200 


600 


1,200 


300 


1,200 


8 






55 00 


84 


1 10 


660 


1,320 


660 


1,320 


330 


1,320 


9 






60 00 


90 


1 20 


720 


1,440 


720 


1,440 


360 


1,440 


10 






65 00 


98 


1 30 


780 


1,500 


780 


1,560 


390 


1,560 


11 






70 00 


1 06 


1 40 


' 840 


1,680 


420 


1,680 


420 


1,680 


12 






75 00 


1 14 


1 50 


900 


1,800 


900 


1,800 


450 


1,800 


13 






80 00 


1 20 


1 60 


960 


1,920 


960 


1,920 


480 


1,920 


14 






85 00 


1 28 


1 70 


1,020 


2,040 


1,020 


2,040 


510 


2,040 


15 






90 00 


1 36 


1 80 


1,080 


2,160 


1,080 


2,160 


540 


2,160 


16 






95 00 


1 44 


1 90 


1,140 


2,280 


1,140 


2,280 


570 


2,280 


17 






100 00 


1 50 


2 00 


1,200 


2,400 


1,200 


2,400 


600 


2,400 


13 






125 00 


1 88 


2 50 


1,500 


3,000 


1,500 


3,000 


750 


3,000 


19 






150 00 


2 26 


3 00 


1,800 


3,600 


1,800 


3,600 


900 


3,600 


20 






166 66 


2 50 


3 33 


2,000 


4,000 


2,000 


4,000 


1,000 


4,000 



Monthly contributions are based on 1% per cent, of the monthly earnings. 



Wages between classes may be included in the next highest class, e.g., if average 
wages amounted to $52 per month, applicant for membership shall be entitled to 
enter the association under Class 8, or at the rate of $55 per month. 

Schedule of contributions and benefits for new employees forty-five years of age 
and over, same as shown above, excepting that the death benefit shall be only $100. 

Schedule of contributions for death benefits only, 20 cents per month for each 
$100 of death benefit. 

The following table of an employees' benefit association shows another way of 
classification of contributions and benefits: — 



1917.1 



HOUSE — No. 1850. 



235 



Schedule of Contributions for Members under Forty-five Years of Age. 















■P • 03 O 


+■> oo - *-i a>-rt 














.£ £ d-C 


.d-o.2 o o 2 














.S?£<0~ 
















^M o > 


Weekly Pay of Em- 
ployees Govern- 






a 

.2 


a 

m 

o 


JS 



gh Accident o 
One Hand by 
e the Wrist, or 
ance at or abc 


i Accident o 
Loss of Both 
)r above the 
by Severanc 
s, or by Se\ 
or above Wr: 
bove Ankle. 


ing Highest Class 








03 




muZ^'Z^ * 


THEY MAY ENTER. 


to 

0Q 

03 

o 




"5 

o 
O 

ID 


*3 
w 

>> 


o 

o 

.2 

<D 

a 
o 


otal Loss throu 
of One Eye, of 
ance at or abov 
Foot by Sever; 
Ankle. 


otal Loss throu 
of Both Eyes, o 
by Severance a 
or of Both Fee 
above the Ank 
of One Hand a 
One Foot at or 




fe 




£ 


^ 


W 


H 


H 




f 


1 


$0 15 


$3 00 


$200 00 


$400 00 


$800 00 






2 


20 


3 00 


400 00 


400 00 


800 00 


$13.50 and under. 




3 


30 


4 50 


600 00 


600 00 


1,200 00 






4 


30 


6 00 


400 00 


400 00 


800 00 




I 


5 


40 


6 00 


800 00 


800 00 


1,600 00 


Over $13.50 and not 




6 


50 


9 00 


800 00 


800 00 


1,600 00 


over $18. 
















Over $18 and not over 




7 


75 


13 50 


1,200 00 


1,200 00 


2,400 00 


$30. 
















Over $30, . 




8 


.1 00 


18 00 


1,600 00 


1,600 00 


3,200 00 



Additional death benefits (as allowed by rules), 5 cents per week for each $200. 

To continue membership death benefit only after leaving service requires three 
years' service, one year's membership, five days' notice. (See Rule 25.) Cost, 
5 cents per week for each $200. 

In case of accident, weekly benefit for one hundred and four weeks. 

In case of sickness, weekly benefit after the first six working days for fifty-two 
weeks, and half weekly benefit for additional fifty-two weeks. 

Reasonable surgical bills will be allowed in accident cases, but no medical or 
surgical bills will be allowed in cases of sickness. 

Schedule of contributions for members forty-five years of age and over, 
as follows : — 

Members joining between the ages of forty-five and fifty years, one and one-half 
times above contributions. 

Members joining between the ages of fifty and fifty-five years, one and four- 
fifths times above contributions. 

Members joining between the ages of fifty-five and sixty years, two and three- 
tenths times above contributions. 



The following analyses of three different employees' benefit associations 
in three different cities are made according to the system of Dr. B. S. 
Warren of the Federal Health Service. 

By comparing One with the other it is evident that even with the form 
as complete as this, detailed comparisons of the different establishment 
funds leave much to be desired. 



236 SOCIAL INSURANCE. [Feb. 



Information regarding Employees' Benefit Funds and Medical Relief. 

1 Name of Company. City, Chicago, State, 111. 

2. Average total number of employees. 29085. 

3. Average total number of employees entitled to benefits or medical relief or both in 1914. 

22,755. 

4. Total number of employees to -whom sick benefits were paid for sickness or non-industrial 

accident during 1914. l 2,812. 

5. Total number of days lost on account of sickness or non-industrial accident, as shown by 

the records of benefit association or medical relief system during 1914. 2 79,502. 

6. Average number of days lost on account of sickness or non-industrial accident per SICK or 

DISABLED person in 1914. 8,434. 

7. Average number of days lost on account of sickness or of non-industrial accident per 

EMPLOYEE entitled to benefits or medical relief or both during 1914. 353. 
8 Rate of contribution by company 850,000 annually, and by employees; Class A, 1.75% 

wage; Class B, 1 . 50% wage. 
9. Character of benefits: 

(a) Amount paid beneficiary per day or per week in case of disability from sickness or 

non-industrial accident. y^ wage. 

(b) Amount paid in case of death from sickness or from non-industrial accident. Sickness 

1 yr's wage. Accident 2 yr's wage. 

(c) Cost per employee entitled to benefits of medical relief systems. 

(d) Kind of medical and surgical relief provided. None except Tb. 

Other Information desired. 

Annual or other reports, financial statements, constitution, by-laws, rules and regulations, 
etc., relating to benefit associations of employees providing sick benefits, and to medical and 
hospital relief systems maintained for employees. 

NAME OF ESTABLISHMENT 

ADDRESS Chicago 

NO. OF EMPLOYEES 29,035 in 1915 

NO. OF MEMBERS OF FUND 22,765 

CLASSES OF BENEFITS PROVIDED Cash Only 



A. Membership. 

1. Compulsory. No. 

a. Medical examination. 

b. For all. 

c. For certain classes. 

2. Voluntary. Yes. 

a. Restrictions on entering fund. 

(1) Age. Not over 45. Employees over 46 on passing medical examination may, on approval 

of Superintendent be members except that the death benefit shall only be $100. 

(2) Sex. No. 

(3) Occupation. No. 

(4) Medical examination. Yes. 

(5) Personal statement as to health. Yes. 

(6) Length of employment. 9 months only in disability due to pregnancy. 

(7) Initiation fee. No. 

(8) Moral conduct. 

b. Restrictions on continuance in fund. 

(1) Payment of dues. Yes. 

(2) Forfeit membership on leaving company. Yes, except by death. 

(a) All rights. No. 

(b) Retain life ins. After one year's membership. 

(3) Moral conduct. 

1 If the same person was sick more than one time during the year for which benefits were 
paid, he should be counted as two or more persons according to the number of times he was sick. 

2 This can be computed by dividing the total amount paid in the form of benefits by the 
amount paid for each day of sickness. Please state whether or not Sundays are included in 
the days for which benefits were paid. 



1917.1 HOUSE — No. 1850. 237 



B. Contributions. 
Employers total per year. S50,000 if membership 75% of total employees. 

a. Amount per employee. 

b. Per cent of total receipts. 
Employees. 

a. Amount. 1 Class A, 1.75% wages. Class B, 1.50% wages. Semi-monthly. 

(1) Initiation fee. No. 

(2) Weekly. , 

(3) Semi-monthly. 

(4) Yearly. 

b. Proportion of wages. 2 See A. 

Exemptions or restrictions in payment of contributions. 

a. By employers. 

(1) Conditioned on state of funds. 

(2) Conditioned on per cent of employees who are members. $25,000 if membership 6% 

of total employees; 850,000 if membership is more than 75% of total empla 

b. By employees. 

(1) When fund reaches a certain total. 

(2) When fund reaches a certain per capita amount. 

(3) During sickness. None. 
Assessments or increased contributions. 

a. Employer. 

(1) Death assessments. 

(2) Loans in case of deficit. Yes. 

b. Employees. 

(1) Death Assessment. No. 

(2) To make up deficit. No. 
Collections of contributions. 

a. Employer. 

(1) Monthly payments. 

(2) Annual paynlents. S50,000. 

b. Employees. 

(1) Deductions from payroll. Yes. 

(2) Collections by society. Where not on pay roll. 

(a) Fines for non-payment of dues. No. 

(b) Forfeiture of benefits for non-payment of dues. Yes, when not on pay roll . 

(c) Forfeiture of membership for non-payment of dues. 



C. Cash Benefits for Sickness. 5 

1. Amount per week. y 2 wage on basis of last 60 days pay. 

a. Full period. 52 weeks in any consecutive 3 yrs. — after which death benefits only. If 

recovered may be admitted as new member. 

b. Extended period. No. 

2. Period. 

a. Full benefit. 52 weeks in any consecutive 3 yrs. — after which death benefits only. If 
recovered may be admitted as new member. 

(1) Beginning with 8th day. 

(a) When are limitations removed? 

(2) Ending with 52 wks. 

(a) Any one illness. 52 weeks in any consecutive 3 yrs. — after which death benefits 

only. If recovered may be admitted as new member. 

(b) Any one 36 months. 52 weeks in any consecutive 3 yrs. — after vjhich death 

benefits only. If recovered may be admitted, as new member. 

1 Class A all not in class B. Class B all employees at manufacturing plants, twine mills, 
steel mills, mines and all others who are or may hereafter become entitled to benefits under any 
working man's compensation act or the company's industrial accident plan. 

2 All with salary of over 82,000 assessed on 82,000 basis. 

s When a member receives over 82,000, benefits cannot exceed rate of }-$ of 82,000. 



238 SOCIAL INSURANCE. [Feb. 

b. Partial benefit (for extended period). No. 

(1) Beginning with 

(a) When are limitations removed? 

(2) Ending with 

(a) Any one illness. 

(b) Any one 12 months. 

c. Limitations to a certain amount within given period. 

3. Special restrictions. 

a. Payment of dues. 

(1) For what period before being entitled to benefits. At once, 9 mos. for -pregnancy. 

(2) Prompt payment. 

b. Special causes of disability. 

(1) Accidents. 

(a) Industrial. Class A. 

(Jo) Non-industrial. Class A & B. 

(2) Chronic diseases. 

(3) Venereal diseases. No. 

(4) Use of liquor. No. 

(5) Maternity. Yes, after 9 mdnths. 

c. Evidence of illness. 

(1) Certificate of. 

(a) Physician. Yes, of assoc. M. D. 

(b) Committee. 

(2) Statement of applicant for benefit. Yes. 

(3) Provisions as to. 

(a) Other employment during disability. No. 

(b) Confinement to home. No. 

4. Extensions. No. 

a. By special action in individual cases. 
^ b. To individuals prevented from coming to work by quarantine of others. 
5._In case of death. Sickness 1 yr.'s average wage. Accident 2 yr.'s average wage. 

a. Cash payment of. l 

b. Restrictions. 

D. Medical Benefits. 

1. Character of medical and surgical relief and method of payment. Physical exam. only, 
a. Fund physician. Yes. 

(1) Salary. Yes. 

(2) Fee: Per capita. Per visit. 

[b. Company physician. Member medical and hospital relief for Tb. 

(1) Salary. 

(2) Fee: Per capita. Per visit. 

c. Family physician. 

(1) Fee: Per capita. Per visit. 

d. Hospital care. 

(1) What extra charge. 

e. Nursing. 

(1) Visiting. 

(2) Home. 

f. Supplies and appliances. 

(1) By fund. 

(2) By company. 

2. Period during which medical benefits are provided. 

a. Length in 12 months. 

b. Extension of period. 

3. Special restrictions. 
a. Payment of dues. 

(1) For what period before being entitled to benefits. 

(2) Prompt payment. 



1 Class A receives death benefits for all accidents. Class B receives death benefits for only non- 
industrial. 



1917.] HOUSE — No. 1850. 239 

b. Special causes of disability. 

(1) Accidents. 

(a) Industrial. 

(b) Non-industrial. 

(2) Chronic diseases. 

(3) Venereal diseases. 

(4) Use of liquor. 

(5) Maternity. 
4. Extensions. 

a. By special action in individual cases. 

b. To individuals prevented from coming to work by quarantine of others. 

E. Administration. 

1. General character of control. Joint. 

a. Cash benefits. Joint. 

b. Medical benefits; joint; by employer; by employees. 

2. Control by employer. 

a. Method. 

b. Do employees contribute part or all ? 

3. Control by employees. 

a. Method. . 

b. Does employer contribute part or all ? 

4. Joint control. Yes, 32 Trustees. 

a. Method. Board of Trustees, 3^ elected by members, y> appointed by Company; Pres. of 

Co. ex-officio Chairman and entitled to vote. 

b. Proportionate contribution. 

5. Are whole-time medical officers employed '' Yes. 

6. Appeals: Provision for. Yes. 

1915. 

Contribution of members, 8286,409 65 

Contribution of Company, .......... 50,000 00 

Amount in Cash, Bal., etc., . 21,747 07 

Expenditures in 1915, $287,281 77 

Reserve Dec. SI, 1915 150,000 00 

Balance available for expenditure December 31, 1915, . ..... 837,101 44 



At McCormick works to certify disability for 90,000 members 1 full time Asso. physician {mem- 
bers not scattered). 

At another plant one physician for 1,200 (members loidely scattered). 

NAME OF ESTABLISHMENT 

ADDRESS Pittsburgh, Pa 

NO. OF EMPLOYEES 22,000 1916 

NO. OF MEMBERS OF FUND 12,000 

CLASSES OF BENEFITS PROVIDED Cash 



A. Membership. 
Compulsory. 

a. Medical examination. 

b. For all. 

c. For certain classes. 
Voluntary. Yes. 

a. Restrictions on entering fund. Employees. 

(1) Age. 50. 

(2) Sex. No. 

(3) Occupation. No. 

(4) Medical Examination. Yes. 

(5) Personal statement as to health. Yes. 

(6) Length of employment. No. 

(7) Initiation Fee. No. 

(8) Moral conduct. No. 



240 SOCIAL INSURANCE. [Feb. 



b. Restrictions on continuance in fund. 

(1) Payment of dues. Deducted from payroll. 

(2) Forfeit membership on leaving company. Yes. 
(o) All rights. Yes. 

(b) Retain life ins. No. 

(3) Moral conduct. Yes. 



B. Contributions. 
Employer's total per year. 

a. Amount per employee. 

b. Per cent of total receipts. 

Employees. .25, .50, .75, §1.00, S1.25, S1.50, per month, according to class. 

a. Amount. 

(1) Initiation fee. 

(2) Weekly. 

(3) Monthly. .25, .50, .75, §1.00, SI. 25, §1.50, per month, according to class 

(4) Yearly. 

b. Proportion of wages. 

Exemptions or restrictions in payment of contributions. 

a. By employers. 

(1) Conditioned on state of funds. 

(2) Conditioned on per cent of employees who are members. 

b. By employees. 

(1) When fund reaches a certain total. 

(2) When fund reaches a certain per capita amount. 

(3) During sickness. 
Assessments or increased contributions. 

a. Employer. 

(1) Death assessments. 

(2) Loans in case of deficit. 

b. Employees. 

(1) Death Assessment. 

(2) To make up deficit. ■ 
Collections of contributions. 

a. Employer. 

(1) Monthly payments. 

(2) Annual payments. 

b. Employees. 

(1) Deductions from payroll. Yes. 

(2) Collections by society. 

(a) Fines for non-payment of dues. 

(6) Forfeiture of benefits for non-payment of dues. Yes. 

(c) Forfeiture of membership for non-payment of dues. 2 Mos. 



C. Cash Benefits for Sickness. 
Amount per week. §2.75, §5.50 §8.25, §11.00, §13.75 and §16.50. 

a. Full period. During disability or until service pension granted. 

b. Extended period. 
Period. 

a. Full benefit. 

(1) Beginning with 

(a) When are limitations removed? 

(2) Ending with 

(a) Any one illness. 

(b) Any one 12 months. 

b. Partial benefit (for extended period). 

(1) Beginning with 

(a) When are limitations removed? 

(2) Ending with 

(a) Any one illness. 

(b) Any one 12 months. 

c. Limitations to a certain amount within given period. 



1917.] HOUSE — No. 1850. 241 

3. Special restrictions. 
a. Payment of dues. 

(1) For what period before being entitled to benefits. 

(2) Prompt payment. 

b Special causes of disability. 

(1) Accidents. 

(a) Industrial. 

(b) Non-industrial. Yes. 

(2) Chronic diseases. Xo. 

(3) Venereal diseases. Xo. 

(4) Use of liquor. Xo. 

(5) Maternity. 

c. Evidence of illness. Yes. 

(1) Certificate of 

(a) Physician. Yes, if requested. 

(b) Committee. 

(2) Statement of applicant for benefit. Yes. 

(3) Provisions as to 

(a) Other employment during disability. 

(b) Confinement to home. 

4. Extensions. 

a. By special action in individual cases. 

b. To individuals prevented from coming to work by quarantine ot others. 

5. In case of death. S50, S100, S125, $150. 

a. Cash payment of. 

b. Restrictions. 

D. Medical Benefits. » 

1. Character of medical and surgical relief and method of payment. 

a. Fund physician. Yes. 

(1) Salary. 

(2) Fee: Per capita. Per visit. 

b. Company physician. 

(1) Salary. 

(2) Fee: Per capita. Per visit. 

c. Family physician. 

(1) Fee: Per capita. Per visit: 

d. Hospital care. 

(1) What extra charge. 

e. Nursing. 

(1) Visiting. 

(2) Home. 

/. Supplies and appliances. 

(1) By fund. 

(2) By company. 

2. Period during which medical benefits are provided. 

a. Length in 12 months. 

b. Extension of period. 

3. Special restrictions, 
o. Payment of dues. 

(1) For what period before being entitled to benefits. 

(2) Prompt payment. 

b. Special causes of disability. 

(1) Accidents. 

(a) Industrial. 

(6) Non-industrial. 

(2) Chronic diseases. 

(3) Venereal diseases. 

(4) Use of liquor. 

(5) Maternity. 

4. Extensions. 

a. By special action in individual cases. 

b. To individuals prevented from coming to work by quarantine of others. 

1 None. 



242 SOCIAL INSURANCE. [Feb. 



E. Administration. 
General character of control. 

a. Cash benefits; joint; by employer; by employees. 

b. Medical benefits; joint; by employer; by employees. 
Control by employer. Yes. 

a. Method. Superintendent in charge chosen by the president of company. Advisory com- 

mittee: % selected by members, J^ appointed by company. 

b. Do employees contribute part or all ? 
Control by employees. 

a. Method. 

b. Does employer contribute part or all ? 
Joint control. 

a. Method. 

b. Proportionate contribution. 
Are whole time medical officers employed ? Yes. 
Appeals: Provisions for. 



Information regarding Employees' Benefit Funds and Medical Relief. 

1. Name of Company. City, Chicago, State, III. 

2. Average total number of employees. 6,757. 

3. Average total number of employees entitled to benefits or medical relief or both in 1914. 

5,4.73. 

4. Total number of employees to whom sick benefits were paid for sickness or non-industrial 

accident during 1914. l 508. 

5. Total number of days lost on account of sickness or non-industrial accident, as shown by 

the records of benefit association or medical relief system during 1914. 2 11,816. 

6. Average number of days lost on account of sickness or non-industrial accident per SICK 

or DISABLED person in 1914. 23.26. 

7. Average number of days lost on account of sickness or of non-industrial accident per 

EMPLOYEE entitled to benefits or medical relief or both during 1914. 2.16. 

8. Rate of contribution by company, operating expenses, and by employees, S0.30-S2.50 per 

week. 

9. Character of benefits: 

(a) Amount paid beneficiary per day in case of disability from sickness or non-industrial 

accident. $040-83.33. 
(6) Amount paid in case of death from sickness or from non-industrial accident. Sickness 

1 year's pay. Accident 2 years' pay. 

(c) Cost per employee entitled to benefits of medical relief systems. 

(d) Kind of medical and surgical relief provided. 



Other Information desired. 

Annual or other reports, financial statements, constitution, by-laws, rules and regulations, 
etc., relating to benefit associations of employees providing sick benefits, and to medical and 
hospital relief systems maintained for employees. 



NAME OF ESTABLISHMENT 

ADDRESS Chicago 

NO. OF EMPLOYEES 6,757 

NO. OF MEMBERS OF FUND 5,475 

CLASSES OF BENEFITS PROVIDED Cash Only. 



1 If the same person was sick more than one time during the year for which benefits were 
paid, he should be counted as two or more persons according to the number of times he was 
sick. 

2 This can be computed by dividing the total amount paid in the form of benefits by the 
amount paid for each day of sickness. Please state whether or not Sundays are included in 
the days for which benefits were paid. 



1917.] 



HOUSE — No. 1850. 



243 



A. Membership. 



Compulsory. No. 

a. Medical examination. 

b. For all. 

c. For certain classes. 
Voluntary. Yes. 

a. Restriction on entering fund. 

(1) Age. Not over 55. 

(2) Sex. 

(3) Occupation. 

(4) Medical examination. Yes. 

(5) Personal statement as to health. 

(6) Length of employment. 

(7) Initiation fee. 

(8) Moral conduct. 

b. Restrictions on continuance in fund. 



Yes. 



Payment of dues. Yes. 

Forfeit membership on leaving company. 

(a) All rights. Except death benefits if a member for one year. 

(b) Retain life ins. 
Moral conduct. 

Classified according to earning: — Classes 1 to 17 vary from $20 per month to $100 per month 
by 85 a class; class 18, $125 per month; class 19, $150 per month; class 20, $166. 



U) 
(2) 



(3) 



B. Contributions. 

1. Employer's total per year. Operating. 

a. Amount per employee. 

b. Per cent of total receipts. 

2. Employees $0.3O-$2.50 a class. 1 

a. Amount. $0.80-$2.50 a class. 

(1) Initiation fee. No. 

(2) Weekly. No. 

(3) Monthly. $0.80-$2.50 a class. 

(4) Yearly. No. 

b. Proportion of wages. 

3. Exemptions of restrictions in payment of contributions. 

a. By employers. 

(1) Conditioned on state of funds. 

(2) Conditioned on per cent of employees who are members. 

b. By employees. 

(1) "When fund reaches a certain total. 

(2) When fund reaches a certain per capita amount. 

(3) During sickness. No. 

4. Assessments or increased contributions. No. 

a. Employer. 

(1) Death assessments. No. 

(2) Loans in case of deficit. Yes. 

b. Employees. 

(1) Death Assessment. No. 

(2) To make up deficit. No. 



1 


CLASS. 


Month's 
Due. 




CLASS. M ™£' s 


1, 




$0 30 


11, . 


SI 06 


2, 






38 


12, . 










1 u 


3, 






46 


13, . 










1 20 


4, . 






H 


14, . 










1 28 


5, 






60 


15, . 










1 36 


6, 






68 


16, . 










l u 


7, 






76 


17, . 










1 50 


8, 






84 


18, . 










1 88 


9. 






90 


19, . 










2 26 • 


10, 






98 


20, . 










2 50 



Classes 1 to 17 vary from $0.40 to $2 per day, increasing $0.10 per day according to class; class 
18, $2.50; class 19, $3; class 20, $8.38. 



244 SOCIAL INSURANCE. [Feb. 

5. Collections of contributions. 

a. Employer. 

(1) Monthly payments. 

(2) Annual payments. 

b. Employees. 

(1) Deductions from payroll. Monthly. 

(2) Collections by society. When nothing due on payroll. 

(a) Fines for non-payment of dues. No. 

(b) Forfeiture of benefits for non-payment of dues. Yes. 

(c) Forfeiture of membership for non-payment of dues.JlAo. 

C. Cash Benefits for Sickness. 

1. Amount. Per working day, S0.40-SS.3S. 

a. Full period. In any 52 weeks consecutive, after which death benefits only. If recovered 

may be admitted as new member. 

b. Extended period. No. 

2. Period. 

a. Full benefit. 52 weeks. 

(1) Beginning with 7th working day. 
(a) When are limitations removed? 

(2) Ending with 52d week. 

(a) Any one illness. 52 weeks in any consecutive , after which death 

benefits only. If recovered may be admitted as new member. 

(b) Any one 12 months. After which death benefits only. If recovered may be 

admitted as new member. 

b. Partial benefit (for extended period). No. 

(1) Beginning with 

(a) When are limitations removed ? 

(2) Ending with 

(a) Any one illness. 

(b) Any one 12 months. 

c. Limitations to a certain amount within given period. 

3. Special restrictions. 

a. Payment of dues. If no wage on payroll. 

(1) For what period before being entitled to benefits. At once. 

(2) Prompt payment. 

b. Special causes of disability. Yes. 

(1) Accidents. Yes. 

(a) Industrial. Yes, unless covered by State law. 

(b) Non-industrial. Yes. 

(2) Chronic diseases. No, if member dies xoithin six 'months after joining. 

(3) Venereal diseases. No. 

(4) Use of liquor. No. 

(5) Maternity. No. 

c. Evidence of illness. 

(1) Certificate of. 

(a) Physician. Asso. 

(b) Committee. 

(2) Statement of applicant. Yes, for benefit. 

(3) Provisions as to. 

(a) Other employment during disability. 
(6) Confinement to home. 

4. Extensions. 

a. By special action in individual cases. 

b. To individuals prevented from coming to work by quarantine of others. 

5. In case of death. Sickness 1 year's pay. Accident 1 year's pay. Limit on wage $2,000. 
a. Cash payment of. 

6. Restrictions. Dis., etc. 



1917.] HOUSE — No. 1850. 245 



D. Medical Benefits. 

1. Character of medical and surgical relief and method of payment. Physical exam. only. 

a. Fund physician. Yes. 

(1) Salary. Yes. 

(2) Fee: Per capita. Per visit. 

b. Company physician. 

(1) Salary. 

(2) Fee: Per capita. Per visit. 

c. Family physician. 

(1) Fee: Per capita. Per visit. 

d. Hospital care. 

(1) What extra charge. 

e. Nursing. 

(1) Visiting. 

(2) Home. 

/. Supplies and appliances. 

(1) By fund. 

(2) By company. 

2. Period during which medical benefits are provided. 

a. Length in 12 months. 

b. Extension of period. 

3. Special restrictions. 

a. Payment of dues. 

(1) For what period before being entitled to benefits. 

(2) Prompt payment. 

b. Special causes of disability. 

(1) Accidents. 

(a) Industrial. 

(b) Non-industrial. 

(2) Chronic diseases. 

(3) Venereal diseases. 

(4) Use of liquor. 

(5) Maternity. 

4. Extensions. 

a. By special action in individual cases. 

b. To individuals prevented from coming to work by quarantine of others. 

E. Administration. 

1. General character of control. Joint. 

a. Cash benefits. Joint. 

b. Medical benefits; joint; by employer; by employees. 

2. Control by employer. 
o. Method. 

b. Do employees contribute part or all? 

3. Control by employees. 

6. Does employer contribute part or all? 

4. Joint control. Yes, 20 Trustees. 

a. Method. Board elected \^ by members and J^ appointed by Co. Pres. of Co. ex-officio 

chairman and entitled to vote. 

b. Proportionate contribution. 

5. Are whole time medical officers employed? Yes. 

6. Appeals: Provisions for. Yes. 

In investigating the establishment funds of the middle west, one com- 
mon factor was noted in all, namely, that there were no figures available 
on sickness insurance. The reason for this was obvious. Without ex- 
ception, the establishment funds were managed from the office end with 
a minimum clerical force, and only such figures as were absolutely neces- 
sary from this point of view were on file. 



246 SOCIAL INSURANCE. [Feb. 

Ample material for valuable tables was in the files of all the establish- 
ment funds, but not in such form as to be of any practical use. 

In order that certain figures and tables on sickness insurance might be 
obtained, Dr. Warren is trying to make arrangements for the services of 
additional clerks, at the expense of the Federal government, to tabulate 
much of this material. He has devised, for example, a 3 by 5 inch index 
card, giving the following information: Serial No., age, sex, native or 
foreign born, color, class No. or weekly wage and occupation, as well as 
a disability record of sickness and non-industrial accident, which gives 
the date, time paid for and diagnosis. 

If this plan succeeds within a year we shall have nearly 100,000 of these 
cards on file at Dr. Warren's office in Washington. 

At a meeting of the American Public Health Association in Cincinnati, 
in the section on industrial hygiene, where the subject of social insurance 
was freely discussed, it was interesting to note the various types interested 
in the subject. Besides the representatives of the American Association 
for Labor Legislation there were present practicing physicians, lay and 
medical representatives of local boards of health, industrial physicians and 
surgeons, insurance men, economists, statisticians, actuaries, business men 
and social workers. 

It was apparently the sense of the meeting that social insurance was 
coming sooner or later, and that health insurance was the most logical 
form to consider first. A majority of those present believed in the principle 
of social insurance, but when it came to a consideration of the form, 
method of administration, etc., there were wide differences in opinion, 
and many suggestions were made, some of doubtful value and some most 
unique. Only one man advocated social insurance as an emergency 
measure. Some believed it should come next year; some in two, three or 
five years; while many of the more conservative advocated a most careful 
study of the whole situation, and what it would mean directly and in- 
directly, before drafting legislation, especially as there were such wide 
differences of opinion as to the estimated cost. 

On the whole, there seemed to be a decidedly conservative attitude. 
Several stated frankly in the informal discussions during the week that 
when social insurance did come they would like to see it in some other 
man's State first. For example, a very keen advocate of the principle in 
New York said he hoped the Massachusetts Legislature the coming year 
would pass a bill for social insurance. When asked why he did not 
advocate one for the New York Legislature, he replied that New York 
would be in a better position to introduce a bill after the plan had been 
tried out in Massachusetts for a year or two, and that his Legislature could 
profit by the mistakes of the Massachusetts Legislature. 

Because of the many points giving rise to wide differences of opinion 
among the interests concerned, several advocated the introduction of a 
broad general bill, which would allow these various differences of opinion 
to be settled later as administrative details. 



1917.] HOUSE — No. 1850. 247 

This plan did not meet with hearty approval, as the majority considered 
administrative details under these conditions to be dangerous and subject 
to varied methods of interpretation. 



DESCRIPTIVE ACCOUNT OF NATIONAL HEALTH INSURANCE 
SYSTEMS IN FOREIGN COUNTRIES. 

(Prepared by the Massachusetts Bureau of Statistics.) 

The term "health insurance" broadly defined, and as used in this 
report, embraces all so-called " sickness insurance systems" or "health 
insurance systems" whether they provide merely for the payment of cash 
benefits in case of sickness or, in addition thereto, for the payment of 
maternity benefits, accident benefits for limited periods of time, and 
funeral expenses, and for the furnishing of medical attention, nursing 
and therapeutic appliances. 

In at least 16 European countries systems of health insurance under 
governmental supervision and regulation have been established. These 
countries are as follows : 



Germany. 


Luxemburg. 


Netherlands. 


Russia. 


United Kingdom. 


Norway. 


Switzerland. 


Belgium. 


Austria. 


Servia. 


France. 


Denmark. 


Hungary. 


Roumania. 


Italy. 


Sweden. 



In all of these countries except Belgium, Denmark, and Sweden, com- 
pulsory systems have been established. In France, Italy, and Russia, 
the compulsory features apply only to persons employed in certain specified 
occupations, but in the other ten countries having compulsory systems 
all wage-earners and salaried employees earning annually less than a 
stated amount (with certain exceptions) are required to insure. The 
cost of insurance in each of the 13 countries having compulsory insurance 
systems is met by joint contributions, but the proportions borne by the 
employers, the employees and the State vary greatly in the several 
countries, and in all except the United Kingdom the contributions vary 
according to the amount of wages earned by the insured persons, and the 
benefits granted vary according to their contributions. In the United 
Kingdom uniform contributions are made by all persons insured, and 
uniform benefits are granted irrespective of their earnings. Ordinarily, 
district or trade funds under mutual management are established as 
" insurance carriers" (in connection with both compulsory and voluntary 
insurance systems) and in nearly all of the countries private or semi- 
official associations, labor organizations, and societies are also authorized 
to carry health insurance, provided they meet certain requirements made 
of " approved societies." 

In Belgium, Denmark, and Sweden voluntary health insurance systems 
under government supervision have been established, but no compulsory 



248 SOCIAL INSURANCE. [Feb. 

system has yet been established in these countries. In several of the 
countries having compulsory systems, provision is also made for volun- 
tary health insurance, and in connection with all of these voluntary sys- 
tems it is customary for the government to grant substantial subsidies 
and to render further assistance by bearing a portion of the expenses of 
administration. Experience has shown, however, that in no country 
has voluntary health insurance appealed to any large percentage of the 
population, and that the very persons who are most in need of the pro- 
tection afforded by such insurance are usually those who will not, volun- 
tarily, insure. 

In the following paragraphs of this report the health insurance systems 
in the several countries have been discussed in the order of the countries 
named above. The compulsory systems have received first consideration, 
except where a country may have both a compulsory and voluntary sys- 
tem, in which case both have been discussed in connection with that 
country, while the voluntary subsidized systems in Belgium, Denmark, 
and Sweden have received later consideration. 

Wherever possible the original sources such as the reports of the 
government insurance departments and other official reports have been 
consulted in order to ascertain the more important facts concerning 
the date of the establishment of the several systems; the classes of the 
population covered; the methods of administration; the cost to the per- 
sons insured, to employers, and to the State; and other important data 
with reference to the operation of the systems. For the use of the 
Commission an extensive bibliography, both on old-age pensions and 
health insurance, was prepared by the Bureau of Statistics, but because 
of limitations of time and space it has not been found advisable by the 
Commission to publish it in connection with this report. 

Germany. A comprehensive system of social insurance, including sickness, 
accident, old-age and invalidity insurance, was established in Germany during 
the period 1883-1889 by a series of acts, of which that relative to sickness insurance 
passed in 1883 was the first, followed in 1884 by an act providing for accident 
insurance, and in 1889 by an act providing for old-age and invalidity insurance. 
These acts, with later amendments, were codified into a single social insurance 
code in 1911. The present social insurance system in Germany is the result, there- 
fore, of about 30 years of careful experiment. Each feature of this system has 
been developed in such manner as to best correlate it with the others, consequently 
no single feature can be properly discussed without some reference being made to 
those with which it is intimately related. 

Health insurance is required of all wage-earners and salaried employees whose 
annual earnings are less than a stated amount. Those to whom the compulsory 
features of the law do not apply, may voluntarily insure, subject to certain provi- 
sions of the code. Various types of "sick funds" are provided for, including 
"district funds", "establishment funds", "guild sick funds", "miners' funds", etc., 
but the "district funds" provide insurance for a majority of the insured persons. 

Premiums are paid by employers and employees, two-thirds of the cost of insur- 
ance being borne by the employee and one-third by the employer, except in the 
case of the "guild sick funds" toward which employers and employees contribute 
equally. The government contributes only to the extent of paying certain expenses 



1917.] HOUSE — No. 1850. 249 

of supervision. The employer is held responsible for the total amount of the 
premiums, but he may deduct the employee's share from the wages. Payment 
by the employer is made by means of stamps affixed weekly to receipt cards, which 
the insured persons are required to possess, except that under certain regulations 
the employer may make payment directly to the society by which his employees 
are insured. The amount of the premiums and the cash benefits granted are cal- 
culated as percentages of wages. Certain minimum benefits must be granted, of 
which the principal ones are medical care, partial wages during illness, maternity 
benefits, and funeral benefits. Hospital care may be given as a substitute for home 
treatment. Nearly all of the societies furnish more than the minimum benefits 
required by law. 

The system includes all forms of sickness and also disability for 13 weeks, when 
such disability is the result of an industrial accident. From the third day of illness 
a cash benefit of 50 per cent of the average daily wages is given during a period of 
26 weeks, which may be increased to 75 per cent of the daily wages, and payment 
may be extended over a period of one year. Should the illness continue longer than 
one year, the case is cared for under the invalidity insurance laws. One-half of 
the cash allowance may be paid to the dependents of a patient in certain cases. 
In addition to these benefits the insurance societies provide various other benefits. 
For example, medical attention, nursing, and hospital care are often continued 
during convalescence beyond the usual period of 26 weeks; medicines and thera- 
peutic appliances are commonly furnished; operations are sometimes paid for; 
treatment at a sanatorium (especially for tubercular cases) is frequently provided; 
and occasionally dental care is given. 

Insured women receive as maternity benefits cash allowances for two weeks 
before and six weeks after delivery, or a nursing benefit up to twelve weeks after 
confinement, or home nursing, or hospital care with one-half the cash aid. The 
societies may also provide similar benefits for the wives of insured men. Since 
the war the German government has considered it an imperative State duty to 
furnish additional benefits for the wives of insured men serving at the front. By 
a decree of December 3, 1914, it voted 2,000,000 marks ($476,400) a month to be 
expended for maternity benefits of 25 marks ($5.96) to meet the cost of childbirth; 
1 mark ($0,238) a day for a period of 8 weeks, of which 6 weeks at least must be 
after confinement; 10 marks ($2.38) for additional medical care; and a nursing 
allowance of \ mark ($0.1191) per diem for 12 weeks to breast-feeding mothers. 
The total maximum cost of these grants is thus raised to 133 marks ($31.68). 

Funeral benefits of from 20 to 50 times the average daily wages are paid, and 
provision may also be made for the payment of such benefits in the case of de- 
pendents of insured persons. A minimum of 50 marks ($11.91) is fixed, but this 
amount may be increased. 

Local insurance societies and other organizations not operated for profit are 
designated as "insurance carriers". Subject to the supervision of the Imperial 
Insurance Office, these societies are administered jointly by employer and employee, 
the employees having two-thirds of the voting power and the employer, one-third. 

The number of sickness pensions in force on January 1, 1912, was 11,569. The 
total amount paid as pensions on account of sickness during the year was 3,201,735 
marks ($762,653), and the average- pension was 207.46 marks ($49.42). The 
number of pensions in force on January 1, 1914, was 16,555, but data as to the 
amount paid were not available. 

Aside from the beneficent results from the standpoint of individuals aided, the 
health insurance system in Germany has been of great value as a stimulus to the 
p eventive health movement. In connection with the administration of the insur- 
ance system, preventive measures have been adopted and taken the form of public 
lectures on avoidable diseases, of educational tracts distributed by the insurance 
authorities, and of conferences between physicians and workpeople. These 
measures have had a general educational effect resulting in a demand for better 



250 SOCIAL INSURANCE. [Feb. 

housing, sanitation, and hygienic living. The great reduction in the tuberculosis 
death rate during the last two decades has been considered by authorities to be a 
direct result of the establishment of the health insurance system, and of these pre- 
ventive measures. Similarly, although to a less extent, the death rates from other 
serious diseases have decreased. There has also been marked improvement in the 
general health of the wage-earning population, which is recognized to be an 
important factor in the military activities of the Empire. 

United Kingdom. The British Act of December 16, 1911, established com- 
pulsory sickness insurance for all working people between the ages of 16 and 70. 
The act was amended on August 15, 1913, in several particulars, namely: certain 
exemptions permissible; the abolition, reduction and extension of certain benefits; 
and certain minor matters of administration. The act was subsequently amended 
on September 18, 1914, November 27, 1914, and March 16, 1915, in regard to war 
compensations and reduction of benefits in the case of persons entitled to pensions 
for total disablement. Under the British system invalidity is treated as part of 
the insurance against sickness. The British law also holds that, if an avoidable 
and curable disease occurs too frequently in any place, the insurance authorities 
may be permitted to recover a considerable part of the cost occasioned by this 
excessive sickness from the local authorities or from the employer who allowed 
conditions to exist that caused this particular disease. The act applies to all sick- 
ness and accidents not covered by any other law, and becomes compulsory for wage- 
earners whose total annual income is less than £160 ($778.64). Persons already 
receiving a pension or income of £26 ($126.53) or more, and persons wholly de- 
pendent on some one else, are exempt from the law. Except for the first six 
months after the act became effective, no waiting period for medical aid has been 
established. 

The benefits granted consist of a provision for medical treatment and attendance; 
the supply of medicines and certain prescribed therapeutic appliances; and treat- 
ment at sanatoria for all forms of tuberculosis. Medical aid and dental care 
furnished to dependents are optional. Free choice is permitted from a panel of 
physicians, but other arrangements are allowed if the number on the panel is 
insufficient. Remuneration for medical service is arranged by the insurance 
committees according to official regulations. A cash benefit is granted for 26 
weeks from the first, second, or third day after the commencement of the disease 
or incapacity. If the illness continues beyond this period, a disablement benefit 
of 5s. ($1.22) a week is given; but the right to the disablement and money benefits 
ceases in the case of insured persons who have already attained the age of 70. 
Cash aid may be continued during convalescence or may be increased for persons 
who have children dependent upon them; or may be granted in the form of a dis- 
ablement allowance to persons not totally incapable of working, or of an allowance 
to persons who cannot attend work on account of infectious disease. 

The ordinary rate of sickness benefit is 10s. ($2.43) a week for men, and 7s. 6d. 
($1.8'2) a week for women, throughout the whole period of 26 weeks. In the case 
of single minors, 6s. ($1.46) a week is granted to boys, 5s. ($1.22) a week to girls, 
during the first 13 weeks, while boys receive 5s. ($1.22) a week, and girls 4s. ($0.97) 
a week, during the second 13 weeks. The disablement benefit to girls is 4s. ($0.97) 
a week. To married women the sickness benefit granted is 5s. ($1.22) a week, 
during the first 13 weeks, 3s. ($0.73) a week, during the second 13 weeks. They 
also receive a disablement benefit of 3s. ($0.73) a week. These two benefits are 
not payable during two weeks before and four weeks after confinement, except in 
those cases where disease or disablement are neither directly nor indirectly connected 
with childbirth. A maternity benefit of 30s. ($7.30) is paid for four weeks to women 
insured or to wives of insured men, provided that 26 weekly contributions have 
been previously paid. No provision is made, however, for free medical treatment 
or attendance during confinement. No funeral benefit is paid. 

The cost of insurance is divided among the insured, the employer, and the 



1917.1 



HOUSE — No. 1850. 



251 



Government. The proportion paid by each varies according to the daily wage 
earned and the sex of the employed. In Ireland special rates of contributions are 
prescribed. In the case of exceptionally low-paid workers the contributions levied 
on employer and State are proportionately increased, so that the workingman 
actually pays less under the British system than he would have to pay under any 
other. The following table gives the proportion of rates paid: 



WEEKLY CON- 
TRIBUTIONS. 


Weekly Wages 
up to Is. 6d. ($0.37). 


Weekly Wages 

Is. 6d. to 2s. ($0.37 

to $0.49). 


Weekly Wages 

2s. to 2s. 6d. ($0.49 

to $0.61). 




Men. 


Women. 


Men. 


Women. 


Men. 


Women. 


Paid by: — 
Insured, . 

Employer, 

State, 


6d. ($0.12) 
Id. ($0.02) 


5d. ($0.10) 
Id. ($0.02) 


Id. ($0.02) 
5d. ($0.10) 
Id. ($0.02) 


Id. ($0.02) 
4d. ($0.08) 
Id. ($0.02) 


3d. ($0.06) 
4d. ($0.08) 


3d. ($0.06) 
3d. ($0.06) 



The employer is responsible for the payment of insurance but may recover 
advances by deducting from the daily wage of his employees the amount of contri- 
butions paid by him in their behalf. 

When the Act establishing compulsory sickness-insurance was passed in 1911, 
there were among the influential social forces interested in these measures Friendly 
Aid Societies. The British Government decided to recognize those fulfilling the 
requirements of the Insurance Act, and to make societies, not operated for profit 
the administrative organ. These societies are controlled by the members, and, 
supervised by the County Insurance Commissioners who control and manage the 
National Health Insurance Fund. All contributions received and all sums provided 
by Parliament must be paid into this Fund, which grants all benefits and disburses 
all administrative expenses. Any surplus not required to meet current liabilities 
may be made over to the National Debt Commissioners for temporary investment 
in securities authorized by Parliament as secure investments for Savings Banks 
funds. The accounts of the National Health Insurance Fund are audited by the 
Comptroller and Auditor-General. 

Austria. The Austrian compulsory sickness insurance Act was passed on 
March 30, 1888, and was amended on April 4, 1889, and February 11, 1913. The 
Act is closely modelled on the German Act and embraces all industries except 
agriculture, forestry, home work, and domestic service. For administrative 
employees the salary limit is fixed at 2,400 crowns ($486). The Act provides for 
benefits for all forms of sickness and for payments during the first four weeks of 
disability caused by industrial accidents. When illness continues more than three 
days no waiting period is demanded either for cash or medical benefits. The cash 
benefit is 60 per cent of the normal daily wage and during any one illness this 
grant is paid for 20 weeks and may be given for 52 weeks. To dependents one-half 
the cash benefit may be allowed. Insured women receive obstetrical care and a 
maternity cash benefit for four weeks after delivery. The funeral benefit amounts 
to at least 20 times the average daily wage but is never more than $20. Medical 
aid consists of medical treatment, hospital care, medicines, and therapeutic appli- 
ances. Medical treatment to dependents is optional. Insured persons are permitted 
free choice among the physicians who are under contract. 

The weekly contribution levied on the employee is two-thirds of one per cent of 
wages, to which the employer adds one-half per cent. On small ships, however, 
the employer is required to bear the entire cost. 

Sickness insurance is paid out from district funds and other mutual funds, such 



252 SOCIAL INSURANCE. [Feb. 

as establishment and guild funds, not operated for profit. Employers constitute 
two-thirds and employees one-third, respectively, of representation in the adminis- 
trative boards. The funds are supervised by local and provincial officials under 
the authority of the Minister of the Interior. 

Hungary. Sickness insurance was first introduced in Hungary by the Act of 
1854 which made insurance compulsory for workmen in government and privately 
operated mines. The Act of 1891 extended compulsory sickness insurance to all 
employees earning less than 2,400 crowns ($486) annually, exclusive of those in 
agriculture and domestic service. This Act was amended in 1907 so as to include 
employees of government tobacco factories. The Act covers all kinds of sickness 
during the first 10 weeks of industrial accident disability. 

Medical and nursing assistance and treatment are given. Medical treatment 
and hospital care are also granted to dependents. A maternity benefit for six 
weeks after delivery is allowed to wives of insured members. Cash aid of 60 per 
cent of ttie normal daily wage is paid for 20 weeks' illness and such payment may 
continue for one year. Dependents are paid one-half of the cash benefits. In 
case of death a funeral benefit of 20 times the usual daily wage is given. 

Both employer and employee contribute equal shares of the cost. In the case 
of miners two-thirds of the dues are paid by the workman and one-third is paid by 
the employer. The State, as employer, bears from 60 to 62 per cent of the cost of 
insurance for government miners. 

Insurance is administered through miners' funds, local mutual aid societies, and 
the establishment funds of government tobacco factories. Supervision over these 
funds is exercised by the Government Insurance Office. 

Luxemburg. General compulsory sickness insurance was proposed in Luxem- 
burg as early as 1887 but the Act was not adopted until 1901 and went into effect 
on July 31 of that year. The law closely follows the German law and applies to all 
employees except those in agriculture and domestic service; all salaried persons 
receiving more than 3,000 francs ($579) per year, with the exception of government 
and municipal employees already entitled to 13 weeks of sick-aid. The Act provides 
for all kinds of sickness. 

There is no waiting period for medical benefits, which consist of medical and 
nursing assistance and treatment, of medicines and therapeutic appliances, and 
hospital care. Medical benefit to dependents of insured persons is optional. In 
all cases medical aid is paid until the expiration of the thirteenth week, and in cases 
of invalidity may be given for an additional term of 13 weeks after cash allowance 
expires. Free choice of physician is permitted, or of physicians who are under 
contract. 

The waiting period for cash benefit is three days after the commencement of 
illness. It must be paid for 13 weeks but can never be paid for more than one year. 
The cash grant amounts to one-half the normal daily wage of the insured, but is 
never more than three-fourths of that wage. An immediate payment of one-half 
the cash allowance may be made to dependents. Payment of one-eighth of daily 
wages may be granted to insured persons having no dependents. Maternity 
benefit is given any insured woman for four weeks and not more than six weeks 
after delivery, provided she has been insured for at least six months in the year 
preceding confinement. This benefit is optional to wives of insured men. Funeral 
benefit is paid except in the case of suicide. The amount is 20 times the daily 
normal wage, with the maximum payment fixed at 80 francs ($15.44). Two-thirds 
of this sum may be granted to an insured member at the death of his wife and one- 
half of this benefit at the death of a child. 

The employee pays two-thirds of the cost of insurance, to which the employer 
adds one-third. Responsibility of insurance rests with the employer. No contri- 
bution is levied during illness. 

Insurance against sickness is carried by the district funds, by mutual aid societies 
not operated for profit, and recognized local sick-funds, such as miners', guild and 



1917.] HOUSE — No. 1850. 253 

establishment funds. Two-thirds of their committee members are chosen by the 
insured and one-third by the employers. The National Insurance Commissioner 
supervises these funds. 

Norway. The Acts of September 18, 1909, and April 1, 1911 made sickness 
insurance compulsory in Norway for urban workmen earning less than 1,575 marks 
($375.17) and for rural workmen earning less than 1,350 marks ($321.57) annually. 

Medical aid and hospital care are given for a period of 26 weeks but no extension 
of this time is permitted in any one year. Free medical care is also provided for 
either husband or wife and for children under 15 years of age. The cash benefit 
amounts to 60 per cent of the daily wage. Wives of insured members receive a 
maternity allowance for six weeks. The funeral benefit paid is 25 times the daily 
wage, with the maximum limit fixed at 50 kroner (§13.40). 

Insurance is carried by the National Insurance Fund, but workmen may insure 
themselves with local sick-benefit funds and recognized mutual aid societies. These 
societies may determine the actual dues which shall be paid. As a rule, however, 
the workman contributes 60 per cent of his wages and the employer 10 per cent. 
Under no other compulsory insurance system is the employer's share so small. The 
commune grants a subsidy of 10 per cent and the State one of 20 per cent for the 
cost of insurance in order to justify the Crown in somewhat more extended powers 
of administration. 

In 1913 there were 762 societies with an enrollment of 370,567 members who 
contributed 6,065,656 kroner ($1,625,596) during the year. The average benefit 
received per member was 21.55 kroner ($5.78) . The State subsidy in 1913 amounted 
to 1,212,820 kroner ($325,036.00), and the communes contributed 798,406 kroner 
($213,973.00). 

Servia. The compulsory sickness insurance system was adopted by Servia on 
June 29, 1910, and went into effect on July 12, 1910. It applies to all workmen 
engaged in trade and commerce. The law provides for all sickness. 

Medical treatment as well as hospital care are furnished and the daily cash 
benefit paid corresponds to the degree of disability. The amount is usually 50 per 
cent of the daily normal wage. A maternity benefit consisting of medical and cash 
aid for 12 weeks is granted to insured employees. Any funeral benefit is entirely 
optional. 

The cost of insurance is divided equally between employer and employee. The 
State contributes in addition an annual subsidy of 80,000 marks ($19,056.00) to the 
National Organization. 

The insurance is paid out of local mutual sick-funds and miners' and establish- 
ment funds, consolidated into a National Organization of Sick-funds and supervised 
by the Minister of the Interior. 

Roumania. By an Act passed January 25, 1912, and subsequently amended 
on February 14, 1913, April 4, 1913, and June 5, 1913, Roumania adopted, in 
connection with old-age pensions, a sickness insurance system compulsory for all 
employees. No official data are available as to the effect of this law. All forms 
of sickness are provided for, but in cases of industrial accidents the regular benefits 
are given for the first two w r eeks only. 

The cash grant furnished for married workers is one-half of the average wage 
if the patient is cared for at home, and one-fourth if hospital treatment is given. 
In the case of single workers the cash aid received is 35 per cent and 10 per cent, 
respectively. The right to this allowance is forfeited when sickness is caused by 
drunkenness. Both cash and medical benefits are received for a maximum period 
of 16 weeks. Medical treatment, hospital care, and the free supply of medicines, as 
well as of therapeutic appliances, are also furnished. These benefits are also ac- 
corded to wives and children of insured persons, if living with them. A maternity 
benefit is given for six weeks on condition that at least 26 weekly contributions 
shall have been paid. This grant of assistance may be prolonged up to three months, 
provided the woman herself nurses the child. The funeral benefit is graded accord- 



254 SOCIAL INSURANCE. [Feb. 

ing to the five wage-groups into which the workers are divided, and granted only- 
after at least 52 weekly contributions have been made. This benefit amounts to 
60 lei ($11.58) for the first class, and rises to 100 lei ($19.30) for the fifth class. ■ 

The entire cost of insurance is borne by the workman, according to the rate 
established for his particular wage-group. The weekly contribution for each group 
is .05 lei ($0.01), .20 lei ($0.04), .30 lei ($0.06), .45 lei ($0.09), .60 lei ($0.12), 
respectively. The employer is responsible for the payment of contributions which 
he may deduct from the wages of his employees. 

The insurance is carried by local sickness-funds under the supervision of the 
Central Office of the National Insurance Fund. 

Netherlands. On June 5, 1913, the Netherlands adopted compulsory sickness 
insurance. The law applies to all workingmen except domestic servants, govern- 
ment and railroad employees already entitled to sickness-pay under approved 
systems, property and income-tax payers in excess of certain limits, and men serving 
with the colors. Exemption may be claimed, however, by persons earning less 
than 0.4 florins ($0.16) a day, or invalid at the time the law went into effect. The 
law covers all sickness, including pregnancy and childbirth, but excepts sickness 
caused by industrial accident which is cared for under the accident insurance laws. 

A cash benefit of 70 per cent of the mean rate of wages is granted from the third 
day of disability, and continues up to the limit of six months. This allowance may 
be increased to 90 per cent and payment of it continued for one year. As medical 
benefit is not compulsory, arrangements must first have been made for providing 
medical attendance and medicines in order to receive sick-pay. Maternity benefit 
is paid immediately. No funeral benefit is given. 

The insurance is payable by the employer, who may recover by deducting one- 
half of one per cent from the wages of his employees. For special risks of sickness 
special rates of premiums are fixed, which are based on a certain percentage of the 
mean rate of wages. Workmen are divided into seven wage-groups — men earning 
less than 0.7 florins ($0.28) per diem in group I to those earning more than 3.50 florins 
($1.41) per diem in group VII. The State subsidy is used to defray the salaries of 
three district insurance commissioners as well as of certain labor council officers. 

The insurance is carried by the labor councils and the district insurance com- 
mittees exercise supervision over a number of these councils. Two of their four 
unsalaried members are elected by employer and employed in equal proportion, 
while the State appoints an impartial chairman and three unsalaried members. 
There must be a deputy for each member of the Insurance Committee. 

Switzerland. The first Swiss law on subsidized sickness insurance, passed on 
October 5, 1899, was rejected by an overwhelming majority on referendum, May 20, 
1900. In 1906 the Federal Council again took up the question of unifying the 
various isolated legislative acts into a national system and proposed compulsory 
sickness insurance in government institutions with a monopoly of insurance. The 
new law framed was adopted on June 13, 1911, to take effect about January 1, 1914; 
but no statistics are available with regard to its operation. Cantons and com- 
munities may enforce sickness insurance for their population, or for certain classes 
of it only, and may organize public insurance institutions in co-operation with 
existing mutual aid societies. Swiss wage-earners of either sex and enjoying at 
least fairly good health must have an opportunity to join a sick-benefit society. 
Under certain conditions they may transfer from one society to another without 
loss of privilege. For new members the period of probation after entrance must 
not be less than three months. 

Sick members are permitted to choose from a panel of physicians and druggists 
under contract with the societies. The Federal Government fixes schedules of 
payment for medical and pharmaceutical aid, in order to guarantee such choice, 
and prevent excessive demands in cost of service. The waiting period after a 
person becomes ill must not exceed three days. The minimum cash benefit is fixed 



1917.] HOUSE — No. 1850. 255 

at 1 franc ($0,193) per diem, and may be given for not more than 180 days in any 
period of 360 days. Instead of a money grant medical and pharmaceutical help 
may be furnished from the first day of illness for at least six months. If this assis- 
tance has been continued for 270 days in any one' year, the societies need not 
defray more than three-quarters of the expense incurred on this account. Treat- 
ment at hospitals and at sanatoria is optional. Maternity benefits must be granted 
for at least six weeks, where contributions have been paid for at least nine months. 
A minimum nursing allowance of 20 francs ($3.86), which may be increased to 40 
francs (,$7.72), is given for another month. No funeral benefit is provided. 

Cantonal and communal authorities may compel employers to be responsible 
for the contributions levied on such of their employees as are members of govern- 
ment insurance institutions. No insurance contributions can, however, be demanded 
from employers. The State subsidy fluctuates according to the benefits granted. 
It is 3.5 francs ($0.68) for children under 14 years of age; 3.5 francs ($0.68) for 
each male adult; 4 francs ($0.77) for each female adult, if either the minimum 
sick-benefit of 1 franc ($0,193) per day or medical aid is furnished; and it is 5 francs 
($0.97) if both benefits are provided. An additional amount of 50 centimes ($0.10) 
is paid if sick-benefits are continued for 360 days. This sum is increased to a sum 
of from 3 to 7 francs ($0.58 to $1.35) per member in mountainous districts where 
medical aid cannot easily be had. In cases of confinement the State- gives a subsidy 
varying from 20 to 40 francs ($3.86 to $7.72). The total amount of State grants 
may never be more than one and one-half times the sum received by the insurance 
societies from membership contributions for the year. Cantons and communities 
who make sickness insurance compulsory for their population, and who pay in 
part or wholly the contributions of needy persons, receive an additional State 
subsidy amounting to one-third of their expenses on this account. 

Government institutions and recognized mutual aid societies are the insurance 
carriers. These societies must be Swiss corporations, and must accept applicants 
irrespective of political or religious qualifications. The annual balance sheets of 
such societies must be submitted to the Federal Council. Any controversy arising 
is referred to the cantonal courts for decision; and any exceptions taken are then 
submitted to the Federal Insurance Court, appointed by the Federal Council. 
The judges of this court are chosen by the Federal Assembly, and serve for a term 
of six years. 

France. The French Act of June 29, 1894, introduced compulsory sickness 
insurance for seamen and railway employees only, and for miners earning up to 
2,500 francs ($482.50) per annum. In all other industries sickness insurance rests 
entirely with the workman. The Old Age Pension Act of 1907 includes invalidity 
and fixes the maximum annual invalid pension at 360 francs ($69.48). Since 1910 
France has paid insignificant State subsidies to recognized voluntary sickness 
insurance societies. These grants for the most part, however, cover the cost of 
funeral and sick-benefits only. 

With regard to the cost of compulsory insurance, employees contribute two- 
thirds of one per cent of wages, to which the employer adds one-third of one per 
cent. Miners pay up to two per cent of wages, or 48 francs ($9.26) a year, while 
their employer gives a subsidy equal to one-half of his employee's share. 

No recent information is obtainable concerning benefits granted, the adminis- 
tration of insurance carriers, or government supervision of voluntary sickness 
insurance societies. 

Italy. By the Act of 1896 the Italian government required railway employees 
to insure themselves against sickness. Within recent years proposals for general 
compulsory sickness insurance have been under discussion. It is, therefore, all 
the more creditable that in the absence of any national sickness insurance system 
the country adopted on July 17, 1910, a compulsory maternity insurance law, 
applicable to all married and unmarried women between the ages of 15 and 50. 



256 SOCIAL INSURANCE. [Feb. 

No medical benefit is granted, but cash aid is given for four weeks after delivery 
or for not less than 21 days. To this cash benefit of 30 lire ($5.79) the State adds 
a flat subsidy of 10 lire ($1.93) for each case. 

The cost of insurance is shared in equal parts by employer and employed. The 
total contribution thus equally divided amounts to one lira ($.193) for women 
between the ages of 15 and 20, and two lire ($0.39) for those from 20 to 25 years 
old. There is no distinction in rates for married and unmarried women. 

The National Insurance Fund (Cassa Nazionale di Providenca) carries the 
insurance and its offices are responsible for administration and supervision. 

Russia. In Russia sickness insurance has been compulsory for factory and 
mine employees only, and in 1888 it was extended to railway employees. The 
new compulsory sickness insurance Act of June, 1912, applies also to employees 
in navigation, and to all the above-named workmen both in European Russia 
and the Caucasian Provinces. The act is closely modelled on the German insurance 
law. 

The provision for medical aid has been for many decades a direct function of the 
employer who still bears the entire cost for a maximum period of four months. The 
cash benefit for workmen with dependents is from one-half to two-thirds of the 
daily wage, but single workingmen receive from one-fourth to one-half of their 
wage. The cash benefit begins on the fourth day of illness, or earlier, and a sum 
up to 100 per cent of the wage is given for six weeks. The maximum time limit 
for cash aid is fixed at 26 weeks and may be extended to not more than 30 weeks in 
the year in case of repeated illness. This cash allowance is also given for the first 
13 weeks in case of industrial accidents. A maternity cash benefit varying from 
one-half to the full amount of wages is paid for two weeks before and four weeks 
after delivery. This assistance, however, is granted only to members of three 
months ' standing. In case of death, funeral aid from 20 to 30 times the daily wage 
is given, but this is optional to dependents. 

Toward the cost of insurance the employee contributes two-thirds of one per 
cent of his wages, while the employer pays one-third of one per cent in addition to 
the entire cost for medical aid or hospital treatment. Persons earning more than 
five roubles ($2.57) a day or more than 1,500 roubles ($771.90) a year are assessed 
on the daily wage rate. 

Sickness insurance is carried by local mutual insurance organizations and estab- 
lishment funds. In February, 1914, there were in existence 1,096 such funds with 
a membership of 833,973 persons. Supervision is exercised by the Workmen's 
Insurance Council. 

Belgium. Belgium has a voluntary sickness insurance system, but by an act 
of 1851, the State made regulations for recognized mutual sickness insurance 
societies. Since 1904 the State has appropriated annually the sum of 115,000 francs 
($22,195) for distribution among societies providing sick-benefits after the first six 
months. The State subsidy is comparatively small and is given to improve rather 
than extend the system of voluntary sickness insurance. About five per cent of 
the population are members of these societies. In 1913 proposals to introduce 
general compulsory sickness insurance were under discussion, but no information 
on the subject has since been obtainable. 

Denmark. Denmark has no general compulsory sickness insurance. Since 
1892 the State has granted a flat subsidy to recognized voluntary mutual aid 
societies, amounting to one-fifth of their revenues from dues, with a maximum 
limit of two kroner ($0.54) independently of the number of members. 

In 1914 there existed 1,547 such recognized societies in the country which received 
a State subsidy of 2,764,989 kroner ($741,017), and a communal subsidy of 205,043 
kroner ($54,952) for that year. Such a State benefit for any one year is always 
paid over to the society in the year following. No recent information is obtainable 
with regard to membership in recognized societies, or benefits granted by them, or 
their methods of administration. 



1917.] HOUSE — No. 1850. 257 

By the Act of April 24, 1913, which went into effect on January 1, 1914, widows' 
pensions, as distinct from poor relief or compulsory insurance, were established. 
The State and the local commune together pay for each child under two years of 
age an annual maximum allowance of $27; for children between two and 12 years, 
$21.60; and for children aged 13 and 14, $16.20. The total amount disbursed by 
the State for this purpose in 1914-1915 was 96,921 kroner ($25,975). 

Sweden. The Swedish system of voluntary sickness insurance received in 
1891 a new stimulus through direct government subsidies granted to recognized 
sickness insurance funds. These subsidies were augmented in 1898 with an appre- 
ciable effect on the growth of registered societies and their membership. 

In 1912 there were registered 2,063 recognized mutual aid societies, with a 
membership of 637,049, who contributed in fees a total of 6,907,972 kroner 
($1,851,337). The administration of these societies cost 758,256 kroner ($203,213), 
and the State subsidy received by them represented 853,536 kroner ($228,748). 
The following disbursements for the year were made: Sick benefits 6,494,605 
kroner ($1,740,554); funeral benefits 711,303 kroner ($190,629); medical benefits 
211,596 kroner ($56,708). 

Approximately 10 per cent of the population avail themselves of voluntary 
insurance against sickness. Proposals for general compulsory insurance are now 
under discussion, but no definite information can be procured at present. 



258 SOCIAL INSURANCE. [Feb. 



Appendix B. 



OLD-AGE PENSIONS. 

DESCRIPTIVE ACCOUNT OF NATIONAL OLD AGE PENSION 
SYSTEMS IN FOREIGN COUNTRIES. 

Prepared by the Massachusetts Bureau of Statistics. 

Introductory. 

In nearly all of the leading countries with the exception of the United 
States statutory provision for old age insurance or pensions has been 
made. The widely varying insurance and pension systems adopted are 
of three general types : Voluntary insurance; compulsory (contributory) 
insurance; and non-contributory pensions. In the present review no 
extended consideration will be given to the first type, that of voluntary 
insurance, because already in Massachusetts, by Chapter 561 of the Acts 
of 1907, provision has been made for the establishment of a system of 
savings bank life insurance and, therefore, voluntary old age insurance is 
not deemed to be a subject for special consideration by the legislature at 
this time. Accordingly, the present survey is confined primarily to a 
consideration of existing systems of compulsory (contributory) old age 
insurance and of non-contributory old age pensions which have been 
established by national governments. 

No general system of old age insurance or pensions has been established 
by the United States Government nor by any of the individual States, 
although there are in operation special pension systems covering certain 
classes of public employees, such as veterans, retired army and navy 
officers, State employees (in Massachusetts), and firemen, policemen, 
teachers and certain other municipal employees; but these systems 
hardly come within the scope of the present inquiry. Thus far, in the 
United States, the establishment of pension systems covering large 
groups of the population has been confined, principally, to certain im- 
portant railroad systems and other industrial corporations. To a limited 
extent, the operations of these systems have pre-emptied the field, and 
the establishment of any general national or State system of old age 
pensions would therefore result in some duplication as respects beneficiaries 
were the corporation systems still to continue in operation. During re- 
cent years, also, there has been a marked increase in the number of in- 
dustrial insurance policies issued in this country, while many fraternal 
organizations and several important national labor organizations have 



1917.] HOUSE — No. 1850. 259 

established pension systems for the benefit of their superannuated mem- 
bers. Nevertheless, it is true that no very considerable portion of the 
population of this country, or of any of the States, is yet covered by any 
system of old age insurance or pensions. 

Voluntary Old Age Insurance. 

The primary purpose in establishing State systems of voluntary old 
age insurance is to induce wage-earners to provide for their old age by 
affording them opportunities to secure, at low cost, old age insurance 
with a certainty that the payment of pensions is guaranteed by the 
government. Usually the system adopted provides for the establishment 
or designation of an agency which shall collect the premiums, care for 
the reserve fund, and make payment of specified benefits or pensions. 
In most instances, the expenses of administration are met by the govern- 
ment and liberal subsidies are granted, thereby reducing the cost of in- 
surance to the policy holders. In Belgium, where the subsidies in 1912 
constituted about 40 per cent of the benefits paid, the system has proved 
more popular than in other countries where less liberal subsidies are 
granted, and indeed it appears to be true that the success of any voluntary 
old age insurance system is largely determined by the extent to which it 
has been subsidized by the government. 

In Great Britain, Belgium, France, Italy, Spain, Canada, and Massa- 
chusetts, systems of voluntary old age insurance have been provided for 
by law. In Great Britain, a system of postal insurance and annuities was 
first instituted in 1864, and is still in operation although it has been some- 
what modified by later legislation, and has in a measure been supplemented 
by the more recent non-contributory old age pension system established in 
1908; and in France, in addition to a voluntary, contributory, old age 
insurance system first established in 1850, and a system of State aid for 
incapacitated and superannuated workers which became effective in 1907, 
a compulsory, contributory system was also established in 19 10. 

The establishment in Great Britain and France of other pension systems 
which are in a sense supplementary to the voluntary systems previously 
established indicates that, notwithstanding the low cost at which old age 
insurance has been furnished, a considerable portion of the population of 
these two countries has failed to make provision for old age by this means, 
and the failure of many other countries to establish voluntary old age 
pension systems may be taken as an unfavorable commentary upon the 
success of such systems in those countries where they have been adopted. 

Compulsory Old Age Insurance. 

In those countries where old age insurance is made compulsory for 
certain classes of the population (usually wage-earners and persons re- 
ceiving small salaries) it has not been found practicable to attempt to 



260 SOCIAL INSURANCE. [Feb. 

raise more than 50 per cent of the necessary funds from the persons insured, 
and, therefore, except for the provisions of law making insurance ob- 
ligatory, these several systems are quite analogous to the voluntary sys- 
tems under which large subsidies are granted by the government. Even 
in Germany, where the compulsory system has become fully operative, 
the insured persons contribute only 40 per cent of the funds disbursed, 
and in other countries, which have adopted compulsory systems, the con- 
tributions by the beneficiaries rarely exceed 30 per cent of the total dis- 
bursements. The value of the contributory principle, therefore, has not 
been demonstrated as particularly important in so far as the amount of 
the contributions is concerned, and, when the cost of collecting the con- 
tributions is taken into consideration, it is held by many who favor a non- 
contributory system, that the latter will provide equal benefits without 
much additional cost to the State over the former, and at the same time 
will not require the establishment of elaborate administrative machinery 
for the collection of contributions, and for the recording of facts for a long 
period of years, with reference to the contributors. If, however, the num- 
ber of countries which have adopted a compulsory, contributory system of 
old age insurance is any criterion, then such a system appears to be more 
generally favored than either a voluntary or a non-contributory system. 
The list of such countries includes at least eleven in all, namely: Germany, 
France, Sweden, Austro-Hungary, Russia, Italy, Roumania, Netherlands, 
Greece, Luxemburg, and Iceland. 

As the compulsory, contributory system in Germany was the first of 
its kind established, and is, without question, the most comprehensive 
and most widely known, it has been selected as the first to be discussed 
and the other ten countries in this group will be considered in the order 
as named above. 

Germany. The old-age and invalidity insurance system, established in Ger- 
many in 1889, formed a part of a comprehensive system of social insurance which 
also included sickness insurance, established by an act of 1883, and accident insur- 
ance, established by an act of 1884. By subsequent legislation the system was 
extended in scope and perfected in detail, and, in 1911, the several acts and amend- 
ments were consolidated into a single code, and a new feature, that of "survivors' 
insurance" was added. Because of the fact that old-age, invalidity, and survivors' 
insurance are administered as a single system, no one feature of this system can be 
properly discussed without some reference to the other features, nor can data 
with reference to the operation of the old-age insurance feature be presented sep- 
arately, so as to enable one to make comparisons (which may not be misleading) 
between the costs, etc., of old-age insurance in Germany and in other countries. 

As the law now stands (Code of 1911) insurance is obligatory for all persons, 
from the sixteenth to the seventieth year of age, whose annual earnings do not 
exceed 2,000 marks ($476) and who are gainfully employed as: 

(1) Workmen, helpers, journeymen, apprentices or servants; 

(2) Establishment officials or foremen; 

(3) Clerks or apprentices in commercial establishments; 

(4) Actors or musicians; 

(5) Teachers or tutors; 

(6) Masters or seamen of sea-going or inland vessels. 



1917.] 



HOUSE — No. 1850. 



261 



Certain classes of public employees, otherwise provided for, are exempt. Volun- 
tary insurance is open to employers engaged in small business enterprises, to salaried 
employees who earn not more than 3,000 marks ($715) per year, and to wives who 
were insured before marriage, but the number who take advantage of these voluntary 
provisions is negligible. The number of persons compulsorily insured, on the other 
hand, embraces substantially the entire wage-earning population of the Empire. 
The total number of persons insured in 1914 was 11,798,922, or about 17.9 per cent 
of the total population of 66,096,000. 

The insurance funds are derived from three sources: Insured employees, 
employers, and the Imperial revenues. The employer is held responsible for the 
insurance of all persons employed by him and for the payment of the premiums, 
being authorized to deduct the employee's share of the premiums from his wages. 
He receipts the employee's payments by affixing government insurance stamps 
to the employee's receipt cards. The Imperial Government contributes a fixed sum 
each year toward every pension and also bears the expenses of administration 
and of the payment of pensions through the post-offices. 

For administrative purposes the insured employees are grouped in five wage 
classes, determined by total annual earnings, and their contributions are made 
weekly in accordance with the following graded scale: 



Class. 


Annual Earnings. 


Weekly Contribution. 


I, • 




Less than 350 marks ($83.37). 


16 pfennige ($0,038). 


II, . 




350 to 550 marks ($131.01). 


24 pfennige ( .057). 


III,. 




550 to 850 marks ($202.47). 


32 pfennige ( .076). 


IV, . 




850 to 1,150 marks ($273.93). 


40 pfennige ( .095). 


V, . 




More than 1,150 marks ($273.93). 


48 pfennige ( .114). 



In 1912 the total receipts from all sources was 399,938,100 marks ($95,265,255), 
of which amount 34.2 per cent was contributed by employers, 34.2 per cent by em- 
ployees, 13.8 per cent by the Imperial Government, and 17.8 per cent was in the 
nature of interest on accumulated reserves and miscellaneous receipts. 

The benefits comprise: (1) Old-age pensions; (2) Invalidity pensions; (3) Sick- 
ness pensions; (4) Widows' and orphans' pensions, and (5) Medical care. 

The old-age pension is payable from the seventieth birthday to a person who has 
made at least 1,200 weekly contributions, but payment of contributions may be 
omitted without loss of rights during sickness, accidental disability, or military 
service. The required term of insurance is so long (over 23 years) that no person 
could have obtained a pension before 1914. To meet this objection the required 
term was reduced by forty weeks for each year of age over 40 at the time the act 
became operative. Thus a man who was already 70 years of age in 1891 could 
claim an immediate pension. 

An old-age pension is made up of two parts: (1) The Imperial subsidy of 50 
marks ($11.91), which is the same for all pensions, and (2) The insurance annuity, 
which is 60 marks ($14.29) for the first wage class and increases by steps of 30 
marks ($7.15) for each succeeding class. The entire pension thus ranges from 110 
marks ($26.20) per year in the lowest to 230 marks ($54.79) in the highest class. 
If a pensioner has been a member of different wage classes at different times, the 
insurance annuity is prorated. Whatever the amount, pensions are paid monthly, 
in advance. 

The total number of old-age pensions in effect on January 1, 1914, was 87,261. 
The number of old-age pensions has decreased from year to year due to the increased 



262 SOCIAL INSURANCE. [Feb. 

number of invalidity pensions held by persons 70 years of age or over. By way 
of explanation it should be stated in this connection that when an insured person 
who is receiving an invalidity pension reaches the age of 70, he has the option of 
choosing an invalidity or an old-age pension, and the former is usually chosen 
because, ordinarily, it is of a larger amount. 

The average amount of all old-age pensions granted in 1914 was 167.99 marks 
($40.02), or about $3.33 per month. The average has slowly risen, having been 
124 marks ($29.54) in 1891, 145.54 marks ($34.67) in 1900, and 166.15 marks 
($39.58) in 1908. The increase is attributable to two causes: (1) Wages have been 
rising and the proportion of persons in the lower wage classes has consequently 
decreased, and (2) pensions granted during the "transitional period" (1891 to 1914) 
were necessarily kept low because of the small number of contributions which had 
been paid in by the pensioners. Each year up to 1914 the number of contributions 
increased and consequently the sums granted as pensions were automatically 
increased. 

The pension age (70 years) is so high that very few live to enjoy the old-age 
benefit, consequently compulsory old-age insurance would naturally be unpopular 
were not this objection met by the granting of an invalidity pension in case of 
permanent disability before the pension age. Because of the interdependence of 
old-age and invalidity insurance, the latter should be also discussed in this con- 
nection. 

Invalidity is defined as inability, through accident or disease, to earn one-third 
of the normal wages earned in the same occupation and locality. Accidental injury 
sustained in the course of employment is excluded, since incapacity from that 
cause is otherwise provided for. An invalidity pension can be drawn only after 
200 weeks' insurance and after the payment of at least 100 weekly contributions. 

An invalidity pension consists of: 

(a) The Imperial subsidy of 50 marks ($11.91); 

(b) A basic insurance annuity of 60 marks ($14.29) for the first class, increasing by 10 marks 
($2.38) for each succeeding class; and 

(c) A supplementary amount equal to the number of weekly contributions which the pen- 
sioner has paid, multiplied by 3 pf. ($.007) for the first class, 6 pf. ($.014) for the second, 8 pf. 
($.019) for the third, 10 pf. ($.024) for the fourth, and 12 pf . ^$.029) for the fifth class. Under this 
arrangement an invalidity pension will be greater or less than an old-age pension, according to 
the length of the insurance period prior to invalidity. Since 1906, however, invalidity pensions 
have averaged higher than cld-age pensions. 

The Code of 1911 provides a further allowance of 10 per cent of the invalidity 
pension for each child under 16, but such allowance is limited to 50 per cent in all. 
Of 130,609 invalidity pensions granted in 1914, 27,112 carried such allowances. 

The smallest invalidity pension is 116 marks ($27.63) yearly. The average of 
such pensions in 1914 was 200.81 marks ($47.83), as compared with an average of 
167.99 marks ($40.02) for old-age pensions. The average is increasing for the same 
reasons which operate in the case of old-age pensions. 

The number of invalidity pensions in force at the close of 1914 was 998,339, as 
compared with only 87,261 old-age pensions. The number has risen steadily from 
31 in 1891 to 405,335 in 1900, and 868,086 in 1908. As already explained, this 
increase has been accompanied by a decrease in the number of old-age pensions. 

The aggregate payments on account of invalidity pensions in 1912 was 158,715,621 
marks ($37,806,061) as compared with an aggregate of 14,061,878 marks ($3,349,539) 
for old-age pensions. The relative importance of invalidity pensions has increased 
and that of old-age pensions has correspondingly decreased year by year. The 
aggregate expenditures for these two benefits stood as 1 to 2 in 1894, as 2 to 1 in 
1900, as 8 to 1 in 1908 and as 11 to 1 in 1912. In fact, the greater part of the 
invalidity pensions are in reality old-age pensions. Out of 103,200 invalidity and 
old-age pensions granted during 1912 to persons of 50 years of age or over, only 



1917.] HOUSE — No. 1850. 263 

28,702, or 27.8 per cent were to persons of 70 years of age or ovar while 50,677, or 
49.1 per cent were to persons under 65. These figures indicate that incapacity 
from old age more often begins before 65 than after 70 years of age. 

Ordinary cases of sickness are cared for at the expense of the sickness insurance 
funds. But if disability continues beyond the twenty-sixth week, a temporary 
invalidity or "sickness" pension (Krankenrente) is granted. Sickness pensions 
are identical in amount with invalidity pensions, and the definition of disability is 
the same — inability to earn one-third of normal wages. The number of such 
pensions in force January 1, 1914, was 16,555; the entire cost during 1912 was 
3,201,735 marks ($762,653) and the average pension was 192.3 marks ($45.81). 

Under the law of 1891 the only death benefit was the return of contributions to 
the dependents of an insured person who died before receiving a pension. This 
left, not only orphans, but aged and invalid widows without provision. This defect 
in the system was remedied, to some extent, by the widows' and orphans' pensions 
established by the Code of 1911. A pension is payable only to an invalid widow, 
but "widow's money," equal to one year's pension, is paid in any case upon the 
death of the husband. The widow's pension consists of the Imperial subsidy of 
50 marks ($11.91) and of three-tenths of the insurance annuity to which her hus- 
band would have been entitled at the time of death. Aged women are, therefore, 
not as well provided for as aged men, in that the pension is only about one-half 
as much as that granted in case of actual invalidity. There is no "old-age" pension, 
as such, for women. 

The widow's pension provisions became operative in July, 1912. In 1914 pen- 
sions were granted to 9,834 widows, the average amount having been 78.85 marks 
($18.78) per annum, and 30,223 orphans' pensions were granted, the average amount 
having been 78.12 marks ($18.61). 

Whenever it is believed that a case of invalidity can be benefited, or impending 
invalidity prevented, a course of treatment may be given, the expenditure being 
charged to the invalidity and old-age fund. Preventive treatment, in fact, has 
become one of the most beneficent activities of this branch of social insurance. 
Sixty-five or more sanatoria are maintained, at which about 70,000 persons are 
treated annually. The great cause of premature invalidity is tuberculosis, and 
nearly 60 per cent of all the cases treated are tubercular. The efficacy of the treat- 
ment is indicated by the fact that more than 80 per cent of the patients are dis- 
charged with "disability removed." 

The expenditure for invalidity pensions increased from 7,250,000 marks 
($1,726,950) in 1912 to over 9,000,000 marks ($2,143,800) in 1914, while the cost 
of sickness pensions rose from 24,000 marks ($5,717) in 1912 to about 360,000 
marks ($85,752) in 1914. The decrease in expenditures on account of old-age 
pensions was, on the other hand, 400,000 marks ($95,280). 

Invalidity and old-age insurance is administered by forty-one territorial and 
special "institutes" under the general supervision of the Imperial Insurance office. 
The total cost of administration in 1914 was 24,156,658 marks ($5,754,116). The 
cost per 1,000 marks ($238.20) of tocal expenses in 1914 was 81 marks ($19.29) as 
against 83 marks ($19.77) for the years 1912 and 1913. The Central Office, a 
branch of the Imperial Insurance Institute, is administered by highly trained 
experts. The published reports are, therefore, the most comprehensive of their 
kind anywhere issued. 

The most striking feature of old-age relief in Germany is its correlation with a 
comprehensive scheme of workingmen's insurance. Accidental injury in the course 
of employment, sickness, child-birth, permanent invalidity, premature death and 
old age, all are provided for by compulsory insurance. Especially significant, in 
the present connection, is the interdependence of old age with invalidity and 
survivors' insurance. When it is understood that 60 per cent of the insured persons 
die before attaining the seventieth year, and that of all old-age and invalidity 
pensioners, 88 per cent are under 70 years of age and 54 per cent are under 60 upon 



264 SOCIAL INSURANCE. [Feb. 

first receipt of pensions, it is clear that the old-age pensions alone would afford a 
very unsatisfactory degree of protection, nevertheless they do constitute relatively 
large returns upon the investment made in the form of premiums paid by those 
insured. 

Whatever may be the beneficial effects of social insurance in the case of individual 
pensioners, it cannot be denied that this system has resulted in improved standards 
of health and work of the general wage-earning population, and to it has been due 
in some large measure the remarkable industrial development of Germany in recent 
years. 

France. The compulsory old-age insurance law of 1910 prescribes insurance 
for practically all working people "of whatever nationality" who earn less than 
3,000 francs ($579) per annum (including those State employees who do not come 
under the regulations of civil and military pensions). 

The receipt of a pension is conditioned upon the regular payment of premiums 
for 30 years, except that the number of payments is reduced to 28 for all men who 
have performed at least two years' military service; and for women the birth of 
each child is reckoned as one year's insurance, which may be deducted from the 
prescribed 30 payments. There are three groups of premiums depending upon 
age or sex, and corresponding to three wage groups for insurable wage-earners as 
follows: men, 9 francs ($1.74) per year; women, 6 francs ($1.16) per year; minors 
under 18 years of age, 4.5 francs ($0.87) per year. Responsibility for payments 
of premiums rests with the employer who must duplicate his employees' contri- 
butions, which are receipted for by means of stamps affixed to cards. 

The original State subsidy of 60 francs ($11.58) was increased to 100 francs ($19.30) 
by an amendment in 1912. This annual grant is paid in those cases where the 
30 prescribed subscriptions have been made, and is increased one-tenth for every 
insured person of either sex who shall have brought up at least three children to 
the age of 16. If premiums are paid less than 30 but more than 15 years, the State 
subsidy is calculated on a basis of 3.33 francs ($0.64) for each year of complete 
payments. If less than 15 annual payments were made, the State allows no pension 
subsidy whatsoever. 

The pensionable age is 65, but pensions may be drawn at 55 years of age, subject 
to a proportionate reduction both in amount of pension and of State grant. In case 
of death, if three-fifths of contributions were paid in and no pension had been re- 
ceived, children of the deceased may receive 50 francs ($9.65) a month for from 
4 to 6 months; in case there are no children, the widow may receive this amount 
for 3 months; in case of divorce, when the exclusive fault of the husband was the 
ground for divorce, the wife may receive this sum. 

All persons who, in 1910, were already 35 years of age must insure. If between 
35 and 40 years old, the State grant of 60 francs ($11.58) is not diminished; if 
46 years old, it is raised to 62 francs ($11.97). The grant increases 2 francs ($0.39) 
thereafter for every additional year of age at which insurance begins. In accordance 
with provisions of the Act of 1905 persons over 65 years of age receive such a pension, 
exceeding 100 francs ($19.30) but less than 240 francs ($46.32), as their needs may 
require. The OTd Age Pension Act of 1907 includes invalidity, and the maximum 
invalidity pension is 360 francs ($69.48) per year. 

In addition to compulsory insurance, a system of optional insurance has been 
extended to private persons receiving small income, employers engaged in small 
enterprises, peasant proprietors, independent workingmen, and to wage-earners 
whose annual income is more than 3,000 francs ($579) but less than 5,000 francs 
($965). The voluntary annual contribution rate is from 9 ($1.74) to 18 ($3.47) 
francs. 

The estimated number of persons to be insured under this Act is from 10 to 12 
millions. The number of persons insured in 1913 was 7,854,132 and the income 
from the sale of stamps was 45,525,540 francs ($8,786,429). 

On June 30, 1910, the total number of persons pensioned under this Act was 



1917.] HOUSE — No. 1850. 265 

569,456, and on September 30, 1912, this total had increased to 640,532. It is 
estimated that about one-third of the total number of French working men were 
actually insured 18 months after this law became effective. The Act secures 
substantial incomes for many who could not be induced voluntarily to provide 
for their old age through private institutions, and it accomplishes this without 
inviting thriftlessness in the decade before receipt of a pension. Putting the pen- 
sionable age at 65 instead of at 70 brings a much heavier charge upon the French 
Treasury. 

The amounts paid as old-age pensions are slightly higher than those paid in 
Germany, but under the German system certain additional benefits accrue to the 
insured. 

Sweden. The Swedish old-age insurance law of 1913 is more comprehensive 
than that of either Germany or France. The French and German systems are 
practically confined to persons gainfully employed, while the Swedish law applies to 
the whole adult population, including married women. 

Every Swedish man or woman from the sixteenth to the sixty-sixth year, inclu- 
sive, pays an annual tax, or premium, of 3 crowns ($0.80). For incomes over 500 
crowns ($134) a surtax is imposed, ranging up to 10 crowns ($2.68) for incomes over 
1,200 crowns ($322) per annum. Additional voluntary payments may be made, 
not to exceed 30 crowns ($8.04) per year in all. Members (and their wives) of the 
military, naval, and civil service, who are otherwise provided for, and permanently 
disabled persons, are exempt. 

If a pensioner receives poor relief, then his pension must be paid in part or in 
whole to the public charity organization in order to reimburse it to the amount of 
the relief given to such pensioner. If institutional care is given, the institution or 
hospital may claim the pension to reimburse itself to the amount charged for such 
care of a pensioner. If a pensioner is a convict, or imprisoned for more than one 
month, his pension is withheld during that time; his dependents may, however, 
claim it for their support. Habitual drunkenness and voluntary idleness are dis- 
qualifications. Moreover, a pension reverts to the general insurance fund if it is 
not claimed within one year after it becomes due. 

An old-age pension is payable, without respect to incapacity, from the sixty- 
seventh year. An invalidity pension is payable at any age in case of permanent 
disability. The annual amount of the pension is 30 per cent for men, and 24 per 
cent for women, of the whole amount that has been paid in by the beneficiary. In 
addition, the government grants a subsidy of 150 crowns ($40.20) per annum for 
men and 140 crowns ($37.52) for women whose whole annual income does not 
exceed 50 crowns ($13.40). This subsidy is reduced by one-half of the pensioner's 
income over 50 crowns ($13.40), and ceases altogether when the income reaches 
300 crowns ($80.40) for a man or 280 crowns ($75.04) for a woman. 

It will be seen that for the lower wage classes the government subsidy will be 
the chief component of the pension. For a generation *to come, the government 
subsidy will be nearly the sole constituent of all pensions. At least thirty years 
must elapse before the insurance annuity -will amount to any considerable sum. 

In 1914 the number of pensions granted was 33,138 and the total amount paid 
was 1,875,457 crowns ($502,622), or 56.6 crowns ($15.17) per capita. Records 
further show that pensions were granted to 10,565 men, totaling 623,120 crowns 
($166,996), or 58.98 crowns ($15.81) per capita; and to 22,573 women to the amount 
of 1,252,336 crowns ($335,626), or 55.48 crowns ($14.87) per capita. The total 
number of persons insured under the Act in 1914 was 3,225,700. They contributed 
a total of 14,571,000 crowns ($3,905,028). The number of voluntary cases insured 
in 1914 was 628. 

Austro-Hungary. The Austro-Hungary compulsory old-age insurance law of 
1906, in force since January 1, 1909, is restricted to salaried employees, and does 
not, therefore, make general provision for the aged. 

In the Austrian mining industry operated by the State, a compulsory old-age 



266 SOCIAL INSURANCE. [Feb. 

pension fund was established as early as 1854, and the State, as employer, pays 
one-half of the contributions. 

Russia. In Russia no general provision is made for invalidity and old-age 
insurance, but in 1881 an Act was passed which provided for compulsory old-age 
insurance of employees in the government mines. Old-age insurance systems, 
established as early as 1858 by private railroads, were made compulsory in 1888 
for such railroads, and in 1894 for State railroads. 

In 1914 the government paid 117,994 roubles ($60,694) for pensions, which is an 
increase of 1,824 roubles ($939) over the amount for the preceding year. 

Italy. The Italian National Institution for the Insurance of Workers against 
Invalidity and Old Age dates from 1898 and is modeled rather closely upon the 
French National Retirement Fund. In 1899, a law was passed providing that 
employees in the tobacco industry should be insured in this Institution. In 1904, a 
bill for uniform insurance was introduced and became law, and in 1905, this law 
was extended to employees of government engraving and printing offices, and in 
the same. year to employees of the government salt works. In 1908 the com- 
pulsory pension system was extended to include government railway employees: 
in 1910 to include persons engaged in the shipping industry, and in 1913 to include 
sailors. 

The pensionable age is 60 years for men, and 55 years for women. The monthly 
contribution from the wage of an employee is 2 lire ($0.39) for men, 1 lira ($0,193) 
for women. The smallest pension granted is 480 lire ($92.64) for men, 300 lire 
($57.90) for women. The total annual subsidy of the State and the Institution 
given in every case is 34 lire ($6.56) for men, 22 lire ($4.25) for women. 

Roumania. In 1912, compulsory old-age and invalidity insurance was estab- 
lished by law, but there is no evidence at hand to the effect that the system has yet 
become operative. The act appears to be modelled upon both the German and the 
French acts. Under this act, invalidity is defined as inability to earn one-third of 
normal wages, and in this respect the act follows the German precedent. The 
pensionable age is 65 years. The French method of uniform weekly contributions 
for all classes of insured persons was adopted. The weekly rate is 45 bani ($0.87) 
for the first 10 years from the date the act becomes effective, and employer, employee 
and the State contribute equally. The employer is responsible for the worker's 
share, which he may deduct from the wages. The normal old-age pension granted 
is 150 lei ($28.95), and in order to receive it, contributions must have been paid 
altogether for at least 1,200 weeks. The invalidity pension is increased by 10 bani 
$0,193) for every weekly contribution exceeding 200 contributions. It is paid to 
any insured person after he has been ill for 16 consecutive weeks. The number of 
persons insurable in 1913 has been estimated at 150,000. 

Netherlands. An act passed in 1913 provided that old-age and invalidity 
insurance should be compulsory for all "workers" (with certain exceptions) earning 
less than 1,200 florins ($482) per year. Those insured under the act are entitled 
to a pension on attaining the age of 70, or earlier, if incapacitated, incapacity being 
defined as inability to earn one-third of normal wage. Surviving children of insured 
persons also receive annuities until they reach the age of 13 years. In order to be 
eligible, a pensioner must be needy and deserving, and must not have received 
public charity. Persons convicted of crimes, drunkards, and those who lead a 
dissolute life are disqualified. Continuous residence of at least 20 years and con- 
tinuous citizenship of at least 5 years are necessary qualifications. 

Insured persons are grouped in five wage classes, determined by total annual 
earnings as follows: 

First class, less than 240 florins ($96.48). 

Second class 240 to 400 florins ($160.80). 

Third class, 400 to 600 florins ($241.20). 

Fourth class, . 600 to 900 florins ($361.80). 

Fifth class 900 florins and over. 



1917.] HOUSE — No. 1850. 267 

Military conscripts serving with the colors are assigned to the second class and 
their contributions are paid by the State. The weekly contributions for the re- 
spective classes are 20 cent. ($0.08); 24 cent. ($0.096) ; 32 cent. ($0,129); 40 cent. 
($0,161); and 48 cent. ($0,193). Contributions are payable generally by the em- 
ployers who may deduct from the wages of each employee a portion of the contri- 
bution paid in his behalf, the proportion varying according to the wage class of 
the employee. Contributions are paid by means of stamps affixed to cards, or in 
cash to the Local Labor Council. 

The amount of the pension, whether on account of old age or invalidity, is 
computed as follows: a sum described as the "basis" of the pension is first deter- 
mined by multiplying the aggregate amount of the contributions paid by 325; 
the product is then divided by the number of weeks during which the insurance 
has continued. The number of weeks during which invalid pension has been paid, 
and the premiums paid in respect of such weeks, are not taken into account in 
making such computation. The "basis" of the pension is then increased by a sum 
equal to 14 per cent of the total amount of premiums paid, but this sum must in 
no case be less than a fifth of the "basis." In accordance with this formula an 
insured person who has paid 48 weekly contributions each year from the age of 20 
to the age of 70, and whose wages were $5 a week up to the age of 25, $6 a week up 
to the age of 30, and $7 a week thereafter would be entitled to a pension of about 
$2.30 a week at the age of 70. In the event of his becoming incapacitated at the 
age of 30, he would from that time onward receive about $1.25 a week. Should 
such incapacity not occur until his 40th year, he would receive about $1.50 a week, 
and if it did not occur until his 50th year, he would receive about $1.80 a week. 

Medical or surgical treatment at home or in a hospital may be provided when 
it is believed that an insured person might, without such treatment, become per- 
manently incapacitated. If such person has 150 weekly contributions to his credit, 
provision may be made for the payment on behalf of his children under 13 of two- 
thirds of the estimated amount of the invalidity pension to which he may be entitled. 

Provision is also made for the granting of invalidity and old-age pensions. To 
persons who voluntarily insure, contributions of two florins ($0.80) may be paid 
whenever the insured desires, but no more than 80 contributions are to be taken 
into account for any year. The amount of the pension is to be 1.5 per cent of each 
contribution for each half-year which shall have elapsed between the dates of 
the payment of the contribution, and the receipt of the pension, excluding, how- 
ever, years during the major portion of which invalidity pension was received. 

An annual State subsidy of 10,000,000 florins ($4,020,000) is to be paid for a 
period of 75 years. Before 1914 the government paid the districts a subsidy of 
50 florins ($20.10) per pension. The estimated cost for 1914 for invalidity pensions 
was 9,500,000 florins ($3,819,000), and for old-age pensions 4,750,000 florins 
($1,909,500), a total of 14,250,000 florins ($5,728,500) for all pensions paid in 1914. 
Pensions are paid through the State Insurance Bank and Local Labor Councils. 

Greece. A compulsory invalidity and old-age insurance act was passed in 
1907. It is restricted to Greek sailors and the cost is borne in equal shares by the 
insured, the employer, and the government. No statistics as to the operation of this 
act are available. 

Luxemburg. Compulsory invalidity and old-age insurance laws were parsed in 
1911 and 1912. All persons having an annual income of not less than 3,000 marks 
($715) must insure. The pensionable age is 68 years. Invalidity is defined as 
inability to earn two-thirds of normal wage. Institutional care to prevent per- 
manent invalidity and support of dependents may be granted. In the event of 
death before a pension becomes due, death benefits may be paid to the widow or 
the children of a pensioner. The contributiors are at the rate of 2.1 per cent of ihe 
wage earned, and are paid in equal shares by the insured and the employer. The 
State pays a subsidy of 48 marks ($11.43) for evary insured man and 38.40 marks 
($9.15) for every insured woman. Compulsory insurance may be augmented by 



268 SOCIAL INSURANCE. [Feb. 

voluntary insurance for persons receiving an annual income not exceeding 3,600 
marks ($858). 

Iceland. Under a law dated July 11, 1890, a compulsory system of old-age 
and invalidity insurance was established. All servants between the ages of 20 and 
60, all day laborers, and persons working with their parents must annually con- 
tribute to tbis fund 1 krone ($0.27) for men, and 30 <£re ($0.08) for women. The 
male head of each household must pay this contribution for every person who 
resided with him during the year, but he may deduct it from the wages of his 
employees. For non-payment of these contributions, property may be attached. 
The only persons exempt from paying contributions are those without means who 
are responsible for maintaining one or more dependents who are unable to provide 
for themselves; those unable to earn wages on account of sickness or other causes; 
and those who have provided for their old age by purchase of an annuity of at least 
150 kroner ($40.20). 

Pensions are granted to persons over 60 years of age who have received no poor 
relief during a prior period of ten years. The minimum pension is 20 kroner ($5.36) 
and the maximum pension granted may not exceed 200 kroner ($53.60). 

For the first 10 years after the establishment of these relief funds all contributions 
plus accrued interest must be added to the funds. In later years one-half of such 
contributions plus interest is added to the funds, while the remainder is distributed 
in pensions. 

Funds are administered in cities by the magistrates, in rural communities by the 
parish council, and these officials may set aside, as their salaries, 4 per cent of all 
contributions levied. They must also elect two persons who audit the annual 
balance sheet of the respective funds. 

NON-CONTKIBUTORY OLD-AGE PENSIONS. 

Although non-contributory old-age pension systems have been adopted 
in only a very few countries, the operation of these systems is being con- 
sidered with a great deal of interest, particularly since the passage, in 1908, 
of the act which provided for the payment in the United Kingdom of old- 
age pensions on the non-contributory plan. This pension scheme, while 
not yet fully perfected, appears to have worked surprisingly well, and it 
has, therefore, been discussed at some length. Similar systems, previously 
adopted in Denmark, New Zealand, Australia, and New South Wales, 
have also been considered. 

This form of old-age relief is justified by its advocates on the ground 
that all persons who have, for a considerable portion of their adult lives, 
engaged in honorable labor are entitled to freedom from anxiety on 
account of their physical needs during their declining years. Accord- 
ingly, in all such systems deserving persons only, who are without prop- 
erty or sufficient income to provide for immediate necessities, are eligible 
to receive pensions. 

United Kingdom. The British old-age pension act was passed in 1908 and 
revised in 1911, and was the result of earnest consideration for at least twenty-five 
years during which five parliamentary commissions had investigated the subject 
and many different plans had been proposed. The non-contributory plan was 
adopted because that was the plan favored by the labor party and because there 
was urgent need of immediate relief. About one-fifth of the whole population of 
the United Kingdom above the seventieth year were actually paupers when the 
act was passed, and it was recognized that no plan of contributory insurance could 



1917.] HOUSE — No. 1850. 269 

be of any avail to those who were already aged. Both men and women, married 
or single, over seventy years of age, of British nationality, who for 12 years out of 
the last 20 years before consideration of their claims have been resident in the 
United Kingdom, and whose annual income does not exceed £31 10s. ($153) are 
eligible for pensions. The "character" disqualifications are: 

(1) Habitual refusal to work according to ability, opportunity and need. 

(2) Imprisonment for crime during the preceding ten years, without the option of a fine. 
Such imprisonment for six weeks disqualifies for two years after release, imprisonment for a 
longer period disqualifies for ten years. 

(3) Conviction under the inebriates act, which disqualifies for six months unless otherwise 
directed by the judge. Habitual inebriety may disqualify for ten years. 

(4) Persons under detention as lunatics, and inmates of institutions where board and lodging 
amounts to an income above the pensionable limit are disqualified. 

More important in actual effect than any of the foregoing is the disqualification 
of those in receipt of poor relief, except medical aid, after the granting of a pension. 
This may be termed a "thrift" test since it assumes that a pensioner should have 
some meaDS of his own to supplement his pension. Under the original act the 
receipt of poor relief by any dependent of a pensioner was a disqualification, but 
the amendment of 1911 restricts the disqualification to the pensioner himself. A 
pension may be revoked for any cause which would disqualify a new applicant. 

The amount of the pension varies with the pensioner's income, being 5s. ($1.22) 
per week for incomes of not more than £21 ($102) and graded in such a way that the 
total income (including the pension) shall not exceed £34 ($165). The income from 
any property is reckoned at 5 per cent per annum of its net capital value, irrespective 
of the actual income therefrom. In the case of a married couple, the income of 
each is taken to be one-half of the total income of both. Nearly all pensions (about 
94 per cent in 1912) are for the full amount of 5s. ($1.22) per week. 

The normal pension of £13 (about $63 a year) is low when judged by an American 
standard. Still it is notably higher than the average German old-age or invalidity 
pension ($40 and $48 respectively). Moreover an aged couple in Great Britain 
receives two pensions, whereas in Germany such couple receives but a single pension. 
Thus the total annuity of a married couple is nearly three times as large in the 
United Kingdom as in Germany. 

At the close of the fiscal year, 1914-1915, the number of pensioners was 987,238, 
having increased from 647,494 in 1909, and from the outset the number was much 
greater than had been anticipated. The actual enrollment in the first three months 
exceeded the estimates for the second year by 250,000. This great discrepancy 
between the estimated number and the actual number shows that the pension 
system uncovered much unsuspected poverty among the aged. It was supposed 
that only one-third of the population 70 years of age and over could qualify for a 
pension, but as a matter of fact 624 out of each 1,000 persons of pensionable age in 
England and Wales were on the pension rolls, according to the Census of 1911. 
This means that only two out of every five aged persons were in receipt of an annual 
income of at least $153, from earnings or savings. For the United Kingdom as a 
whole, the proportion was 637 per 1,000. 

The great increase (over 200,000) in the pension roll between 1910 and 1911 was 
due to the removal of an important disqualification. As the act first fetood, the 
receipt of poor relief at any time after January 1, 1908, was a bar to the granting 
of a pension. The removal of this disqualification at the close of 1910 added 
160,000 names to the pension roll. In other words, 160,000 persons who were 68 
years of age or over in 1908, received poor relief before attaining the age of 70 years. 
This is rather conclusive evidence that the pensionable age is altogether too high. 

The cost of pensions has increased correspondingly. Thus during the fiscal 
year 1908-1909, the expenditure was £8,077,110, 12s. ($39,307,259), having in- 
creased to £12,315,061, 4s. ($59,931,245) for the fiscal year, 1912-1913. 



270 SOCIAL INSURANCE. [Feb. 

The present "character" and "thrift" tests are less severe than under the 
original act; nevertheless, 12,941 persons were disqualified under these tests during 
1913. Of this number, 10,092 were disqualified because of receipt of poor relief 
after the granting of a pension. In some cases pensioners preferred to be maintained 
in the workhouse to subsisting upon such a small pension as $1.22 per week. In 
other cases, there was a deliberate attempt to secure both forms of relief. By 
means of "character" and "thrift" tests about one person in every thirty applicants 
is disqualified. One of the arguments advanced by advocates of an old-age pension 
was that the cost would, to a large extent, be offset by the reduction in poor relief, 
and this, in a measure, has been found to result. The number of workhouse (alms- 
house) inmates 70 years of age and over in England and Wales has, it is true, 
greatly decreased, but, as such persons are, for the most part, physically or mentally 
unfit to maintain an independent life, even with the aid of a pension, a better test 
is afforded by the number of persons seventy years and over who received "out- 
relief." The decrease in the number of actual paupers in England and Wales 
since 1910 has been 70.9 per cent. However, the old-age pension system, while 
resulting in a decreased expenditure on account of almshouse and out-relief, as 
such, has on the other hand added greatly to the budget of England and Wales, 
and it has been estimated that old-age pensions have cost at least four times as 
much as would have been expended under the former systems of poor relief. 

The maximum pension of £13 ($63 per annum) is less than one-half the cost of 
maintaining a workhouse inmate and less than twice the cost of giving "out-relief" 
to the same individual. The great increase in the cost of old-age pensions, over 
poor relief, is, accordingly, due to increase in the number of persons relieved. The 
pension roll of England and Wales on March 31, 1915, comprised 691,405 names, 
of whom 3,413 received institutional care, and 5,897 received outdoor relief, both 
of non-disqualifying character. The old-age pension system, therefore, in part 
replaces poor relief, in part supplants private charity, and in part supplements 
incomes too small for proper maintenance. 

The principal defects of the old-age pension system are as follows: (1) The 
maximum pension of £13 ($63.26) a year is too small and the income limit for 
eligibility of £31 10s. ($153) a year is too low, in view of the fact that the cost of 
living has risen considerably since 1906; (2) the pensionable age of 70 is too high, 
for the reason that a large proportion of those in need of a pension become incapable 
of earning a living long before reaching 70 years of age; consequently an old-age 
pension ought to be granted as soon as one becomes unable to earn a living, at 
whatever age, such cases being but partially provided for by disablement benefits 
under the Insurance Act. Furthermore, disablement benefits are received only by 
insured persons, who constitute less than 50 per cent of the population over 16 
years of age and who receive an income of less than £160 ($779). 

The old-age pension act is administered by the Local Government Board under 
which are local pension committees for boroughs and urban districts and paid 
district pension officers. These authorities have worked together very conscien- 
tiously, and have displayed tact and sympathy. The cost of administration for 
1913 was about 9s. 8d. ($2.35) for every £100 ($487) of pensions granted, or less 
than 5 cents for every dollar distributed. 

Although it has been found necessary to amend the old-age pension act from 
time to time, and although the system has yet to be perfected in certain details, it 
has operated quite satisfactorily even during the short experimental period of less 
than eight years. The system has proved to be a source of real blessing to the 
aged and deserving poor, not only because of its provision for material needs late 
in life, but because it removes the cause of great anxiety with respect to their 
physical needs during advancing years. 

Denmark. The oldest of the non-contributory pension systems is that of 
Denmark, which dates from 1891. The pension age (60 years) is the lowest fixed 
by any country. The income and property qualification is rather vague, namely: 



1917.] HOUSE — No. 1850. 271 

Inability to provide one's self and dependents with necessary subsistence. The 
required residence is only ten years. The "character" and "thrift" tests, on 
the other hand, are unusually rigorous. No one shall receive a pension who has 
ever been convicted of crime, unless subsequently restored to civil rights, or who 
has received any poor relief, except medical aid, for one's self or dependents, during 
the five years next preceding the application for a pension, or whose own poverty 
has been due to extravagance or disorderly habits. 

The amount of the pension is not determined by fixed rules but varies with 
individual circumstances, and must be sufficient for support, when supplemented 
by the pensioner's other income. In computing the pensioner's means no account 
is taken of any income, ownership of dwelling, etc., amounting to an annual income 
of less than 100 kroner ($26.80). In contrast with Great Britain, New Zealand, 
New South Wales and Australia, where man and wife receive separate pensions, 
the family in Denmark is treated as a unit, and the pension granted to the head 
of a family is for the support of himself and his dependents. The average pension 
increased from $27.23 in 1895 to $42.89 in 1907, this increase having no doubt 
been made in consideration of the increasing cost of the necessities of life. 

There is much variation in the amounts of pensions granted to individuals, 
being larger for heads of families than for individuals, and higher in Copenhagen 
than elsewhere. Of single men only 37.5 per cent, and of single women only 33.4 
per cent in the county as a whole, received more than 200 kroner ($54) during the 
fiscal year 1911-12. The total number of beneficiaries during that period was 
79,340. Of this number 16,710, or 21 per cent, were heads of families; 20,085, or 
25 per cent, were dependents (mostly wives) ; 9,356, or 12 per cent, were single 
men; and 33,034, or 42 per cent', were single women. As in other countries the 
number of pensioners has increased faster than the population, having been 60,066 
in 1902 and 79,340 in 1911. 

This increase is partly due to the removal of disqualifications by successive amend- 
ments to the original act and partly to a greater familiarity with the provisions of 
the act, but more particularly to the great desire on the part of the aged to avoid 
applying for poor relief between the fifty-fifth and the sixtieth year, so that they 
may be eligible to receive a pension. 

Since the inauguration of the system the aggregate cost has increased enormously. 
In 1912-13 the country spent 13,100,000 kroner ($3,510,800) as compared with 
2,600,000 kroner ($696,800) in 1892. In 1913-14 the total net disbursement was 
14,013,954 kroner ($3,755,740), of which the State paid 7,054,354 kroner ($1,890,567) 
the cost being about equally divided between the national government and the 
communes. 

As in New Zealand, pensioners who are unable to care for themselves are cared 
for in special homes, some of which are in groups of detached cottages, others are 
single large buildings. The inmates are under no special restraint and much concern 
for their comfort is shown. In 1911-12, three per cent of the total number of pen- 
sioner were cared for in these homes at a cost of 1,059,834 kroner ($284,036). 

Old-age pensions are administered primarily by the municipal and communal 
authorities, under whom serve paid and well-trained inspectors. The Minister of 
the Interior has general supervision and to him are referred appeals from decisions 
of the local authorities. As the authority to fix the amount of pensions rests with 
the local officials the amount of pensions granted, particularly in the rural com- 
munes, is kept rather low from motives of economy, resulting in some dissatis- 
faction and provision for appealing from such decisions is therefore made. 

New Zealand. The New Zealand old-age pension system was established in 
1898. The Act was amended in 1905 so as to provide that investigations of claims 
might be heard in private. By amendments in 1912 and 1913 the acts relative 
to widows' and military pensions were merged with the old-age pension act. 

All persons, 65 years of age and over, except aliens and Maoris, who have been 
citizens for at least three years, and who have resided in New Zealand for at least 



272 SOCIAL INSURANCE. [Feb. 

25 years (four years absence being allowed), whose property does not exceed £260 
($1,265), and whose income does not exceed £60 ($292) per year, or whose joint 
income in the case of a married couple does not exceed £90 ($438), are eligible to 
receive a pension, provided that the applicant has led a sober and reputable life for 
at least one year next preceding application, has not been imprisoned for as much 
as four months within five years, or for as much as five years within 25 years, and 
has not deserted his (or her) family within 12 years. 

The amount of the pension is £26 ($127) per annum, less £1 ($4.87) for every £1 
of income over £34 ($165) and for every £10 ($48.67) of net property above £50 
($243). In the case of a married couple it is estimated jointly and equally divided. 
Life insurance is not counted as property and income from property is disregarded 
(being offset by the property limit). A pensioner may retain a homestead to the 
value of £650 ($3,163) , which shall revert to the colony at the death of the pensioner. 
Parents having two or more children may, in case of need, receive a pension, — in 
the case of the father at the age of 60 years, and in the case of the mother at the 
age of 55 years. Such pension to parents is the same in amount as an old-age 
pension, but may be increased by not more than £13 ($63) per year if required by 
circumstances. Pensioners who require institutional care, or who are unable to 
maintain homes for themselves, may be maintained in suitable homes or hospitals. 
The cost of maintenance in such cases is deducted from the pension. 

The number of old-age pensioners at the close of the fiscal year ending in 1913 
was 16,509, consituting 36 per cent of the entire population qualified by age and 
residence for receipt of a pension. The great majority (14,017) were receiving 
the "normal" pension of $127. Only 32 were receiving parents' pensions above 
the normal amount. The total amount of pensions paid during the fiscal year was 
£415,761 ($2,023,301) or 7s. lOd. ($1.91) per capita. On March 31, 1915, there 
were in force 19,352 pensions which represented an amount of £475,970 ($2,316,- 
308), while the estimated population, exclusive of Maoris, was 1,095,994 on Decem- 
ber 31, 1914. The per capita cost was therefore 8s. 8d. ($2.11) in 1914. 

The New Zealand old-age pension law is administered by a Commissioner of 
Pensions and by district Registrars, most of whom are court clerks. Pensions are 
paid monthly, in advance, through the post office. 

It must be said that the pension system has not resulted in materially reducing 
expenditures in the form of public charitable aid, but it has tended to decrease 
voluntary charitable contributions, for the reason that tax payers who have con- 
tributed toward the pension funds through taxation appear to be disposed to reduce 
their voluntary contributions to public charities. 

Australia. The Australian invalid and old-age pension law became operative 
July 1, 1909. Prior thereto the separate States of New South Wales, Victoria and 
Queensland had established pension systems of their own, so that the Common- 
wealth Fund took over some 60,000 pensioners in December, 1909, when the separate 
systems were combined in a single system. 

The Australian law is very similar to that of New Zealand. The pension age is 
fixed at 65 years for men and at 60 years for women. The residence, race, citizen- 
ship and character qualifications are similar to those of New Zealand. The prop- 
erty limit is £310 ($1,509). 

An invalidity pension is payable to any person above the age of 16 who is per- 
manently incapacitated for work provided that he (or she) shall have resided in 
Australia for at least five years, is not receiving an old-age pension, has no claim 
upon an employer for accident compensation, has become permanently incapaci- 
tated while in Australia, did not purposely produce the incapacity, and does not 
have property or income in excess of the old-age pension limits. 

The annual pension is such as the Commissioner (or Deputy Commissioner) of 
Pensions in each case "deems reasonable and sufficient", but must not exceed £26 
($127) per annum nor be, such as to bring the pensioner's total income above 
£52 ($253). The "normal" pension of £26 ($127) is subject to a deduction of 



1917.] HOUSE — No. 1850. 273 

£1 ($4.87) for every £10 ($48.67) of net property above £50 ($243) exclusive of a 
homestead, or above £100 ($487) inclusive of a homestead. 

The number of old-age pensioners has increased out of all proportion to the 
increase of population, the percentages of increase from 1910 to 1913 having been 
26.65 for pensioners and 9.95 for population. This is due in part to an increasing 
proportion of old people (immigration of young and middle-aged persons having 
decreased in proportion to the total population), and in part to a lowering of the 
age requirement for women from 65 to 60 years at the close of 1910. There was also 
a small increase attributable to a wider knowledge of the pension plan and to the 
dispelling of the impression that the receipt of an old-age pension implies pauperism. 

Invalidity pensions are also granted in Australia, and, as respects aged bene- 
ficiaries, they are virtually (as in Germany) old-age pensions, and should be con- 
sidered in this connection. On July 30, 1913, the number of old-age pensions in 
force was 82,943,- and the number of invalidity pensions was 13,739. The total 
amount paid in pensions during the fiscal year ending June 30, 1913, was £2,289,048 
($11,139,652) representing a per capita amount distributed fortnightly to these 
pensioners of 19s. 6d. ($4.74). The cost of administration was about 2 per cent of 
the total amount distributed. 

The Australian act is administered by a Commissioner of Pensions with the 
assistance of a deputy in each State and of local Registrars. 

New South Wales. The Old-Age Pension Act became operative on August 1, 
1901, but virtually became inoperative on July 1, 1909, when that portion of the 
Commonwealth Invalidity and Old Age Pension Act relating to old-age pensions 
for men went into effect. An act relative to women, 60 years of age and over, 
became operative on December 15, 1910. 

The conditions governing the payment of a pension vary slightly from those 
established under the State act. The pensionable age is 60 years for women and for 
permanently incapacitated men and 65 years for other men. Pensioners must have 
been in residence for at least 20 years except that absences aggregating one-tenth 
of total period of residence are not considered. Aliens and aborigines are disqualified. 
The maximum amount of a pension is £26 ($127), but income and pension com- 
bined must not exceed £52 ($253) ; possession of a home and gifts or allowances 
are not included in income. 

On June 30, 1914, the number of persons receiving old-age pensions was 32,165, 
of whom 14,217 were men and 17,948 were women. The per capita fortnightly 
pension was 19s. 5d. ($4.72). During the fiscal year ending in 1914 the Common- 
wealth paid for invalidity and old-age pensions a total of £2,579,265 ($12,551,993), 
the administrative cost having been £46,946 ($228,463), and for the asylum care 
of pensioners a total of £14,236 ($69,279). The number of old-age pensions per 
1,000 of population increased from 17.3 per cent in 1913 to 17.5 per cent in 1914, 
while there was an increase in 1914 of £290,217 ($1,412,341) in the total amount 
paid for pensions and an increase of £2,423 ($11,792) in the cost of administration. 



274 SOCIAL INSURANCE. [Feb. 



Appendix C. 



UNEMPLOYMENT. f 

An Act to establish a State Board of Employment. 

1 Section I. There shall be appointed by the governor with the 

2 advice and consent of the council, five persons to serve on a board 

3 to be known as the state board of employment. The said board shall 

4 serve without compensation, and shall consist of two employers of 

5 labor, two representatives of employees and one woman known to 

6 be interested in economic and industrial matters. Two members 

7 shall be appointed to serve for a term of three years, two for a term 

8 of two years and one for a term of one year. The governor shall 

9 designate one member of the board as chairman. 

1 Section 2. The board shall choose a secretary whose salary shall 

2 be fixed by it and whose duty shall be to maintain an office for the 

3 purpose of keeping office records and compiling other information 

4 necessary and incidental to the proper development and maintenance 

5 of the board. 

1 Section 3. All the powers and duties in connection with the 

2 supervision of employment offices and labor now vested in the di- 

3 rector of the bureau of statistics by chapter of the acts of 

4 the year , and all acts in amendment thereof and in addition 

5 thereto, are hereby transferred to the state board of employment. 

6 Any investigation, examination, proceeding or appeal undertaken, 

7 begun or instituted by or before the bureau of statistics prior to the 

8 taking effect of this act may be conducted and Continued to a termi- 

9 nation by the state board of employment in the same manner and 

10 under the same terms and conditions and with the same effect, as if 

11 the jurisdiction of the director of the bureau of statistics had not 

12 been terminated. The four employment offices now under the care 

13 and direction of the director of the bureau of statistics shall be given 

14 over to and maintained by the state board of employment, and the 

15 state board of employment shall have power to further organize and 

16 establish additional state employment offices in any city or town of 

17 the commonwealth where it deems such offices necessary. 

1 Section 4. It shall be the duty of the said board to study labor 

2 conditions and to keep in touch with labor affairs throughout the 



1917.] HOUSE — No. 1850. 275 

3 United States and Europe, and, in addition to reporting to the legis- 

4 lature annually, to make such other recommendations as they deem 

5 wise for the purpose of equalizing and properly distributing labor so 

6 as to prevent unemployment as far as possible. In cases of periods 

7 of unemployment, however, the board shall have the power to recom- 

8 mend legislation providing for special state work under the supervision 

9 of the proper officials, and also to recommend, if necessary, special 
10 legislation providing for such exigencies. 

1 Section 5. There shall be allowed and paid out of the treasury of 

2 the commonwealth for the salary of the secretary and other contingent 

3 expenses in connection with the work of the said board and the estab- 

4 lishment and maintenance of the state employment offices hereinbefore 

5 mentioned such sums as the general court may annually appropriate 

6 for said purposes. 

1 Section 6. The licenses to maintain employment offices shall be 

2 granted by the board of employment and shall be of such classes and 

3 shall be given on such conditions and for such license fees as the board 

4 may from time to time determine: provided, however, that the fees 

5 for each class of license shall be uniform and that no fee under five 

6 dollars or over fifty dollars shall be required. Every applicant for 

7 a license shall file with the board of employment a written application 

8 containing such information as said board may require. Upon the 

9 filing of said application a license may be granted, if upon investiga- 

10 tion the provisions of this act and regulations made thereunder have 

11 been complied with: provided, however, that no application shall be 

12 rejected until the applicant has been notified in writing of the reasons 

13 for such rejection, and has been given a hearing before said board 

14 if he so requests and a reasonable opportunity to disprove the fact or 

15 or facts upon which such rejection is based. 

1 Section 7. In cities, no license shall be issued until the applicant 

2 shall have filed with the board of employment and bonded in the 

3 penal sum of five hundred dollars with two sufficient sureties or one 

4 corporate surety, to be approved by said bureau. The condition of 

5 the bond shall be that said applicant shall repay all fees collected 

6 by him in violation of the provisions of this act or rules adopted here- 

7 under, and shall also refund all fees collected by him, and shall pay 

8 all transportation expenses incurred by employees as far as such re- 

9 funds and payments under the circumstances of the case may be 

10 required by the provisions of this act or the terms of any contract 

11 entered into by him. Such bonds shall be made payable to the com- 

12 mon wealth of Massachusetts, but any person having a claim against 

13 any licenses which is covered by the condition of the bond hereby 

14 required may, with the consent of the chairman of the board of employ- 



276 SOCIAL INSURANCE. [Feb. 

15 ment, bring suit in his own name upon the bond filed by said licensee 

16 against the principal and sureties or surety therein named, and recover 

17 the amount due him. 

1 Section 8. Licenses may be renewed from year to year by the 

2 board of employment on payment of the regular license fee and by 

3 filing a new bond, but the board of employment, for good and sufficient 

4 reason and after a hearing, may refuse to renew or may revoke any 

5 license. 

1 Section 9. Every licensee shall keep records or registers in such 

2 form and giving such information as the board of employment may 

3 direct. Such records or registers shall be subject to inspection by 

4 said board or its agents, and the information therein contained shall 

5 be furnished to the board at such times and in such form as the board 

6 may require. 

1 Section 10. No licensee hereunder and no agent of any licensee 

2 shall pay, rebate or remit to any employer or any agent of any employer 

3 any part of any fee paid or pavable to such licensee with reference to 

4 such employer or agent or any sum or valuable consideration of any 

5 kind in connection with, or in return for, the employment of any em- 

6 ployee; or persuade, induce, or procure, or attempt to persuade, in- 

7 duce or procure, any such employer or agent to discharge an employee; 

8 or knowingly bring about or assist in the employment of any minor 

9 in violation of the laws relating to the employment of minors; or know- 

10 ingly permit any prostitute, gambler, intoxicated person, procurer or 

11 person of bad character to enter or remain in the employment office 

12 conducted by such licensee. 

1 Section 11. Every licensee hereunder shall post in a conspicuous 

2 place in every room used for business purposes in the employment 

3 offices conducted by him a schedule showing clearly the amount, rates 

4 and classification of the fees to be charged, both to employees and 

5 employers, with reference to all kinds of employment as to which such 

6 licensee proposes to act as employment agent. A copy of the schedule 

7 so posted shall be sent to the board of employment, and no licensee 

8 hereunder shall charge or receive in return for services rendered or to 

9 be rendered as an employment agent any fee, commission, gift, or 

10 valuable consideration of any kind whatever, except a fee in money 

11 to the amount stated in such schedule. The schedule so posted may 

12 be changed at any time: providing, that a copy of such changes shall 

13 be sent to said board of employment at least one month before such 

14 changes are posted or acted upon.. 

1 Section 12. No person shall conceal or misrepresent the amount 

2 of wages paid by him to an employee, or received by him from an 



1917.] HOUSE — No. 1850. 277 

3 employer, for the purpose of reducing the amount of any fee paid to 

4 a licensee hereunder in connection with the employment in which 

5 such wages are paid, or fraudulently apply to any licensee for em- 

6 plo}^ment or for an employee for the purpose of assisting another 

7 person to obtain the employment or employee suggested by a licensee 

8 in consequence of such application without the payment of any fee. 

1 Section 13. If a licensee hereunder violates any of the provisions 

2 of section of this act he shall be punished by a fine of not 

3 more than two hundred dollars for each offence, and if he violates 

4 any of the other provisions of this act or any rules adopted hereunder 

5 he shall be punished by a fine of not more than fifty dollars for each 

6 offense; and for any violation his license may be revoked. 

1 Section 14. This act shall take effect on the first day of August 

2 in the year nineteen hundred and seventeen. 



Unemployment in the Organized Industries in Massachusetts, 

1908-1916. 

During the financial depression which occurred during the winter of 
1907-1908, as a result of which a very large number of wage-earners were 
thrown out of employment, it. was found that there was no fund of infor- 
mation available which would serve as an adequate measure of the amount 
of unemployment which then existed as compared with the amount of 
unemployment during normal years. The Director of the Bureau of 
Statistics, therefore, after a careful examination of statistical data bearing 
on the subject of unemployment which were being collected in foreign 
countries and in the State of New York, inaugurated in Massachusetts 
the plan of collecting from organized wage-earners quarterly statistics 
showing the percentages of the unemployed among the members of trade 
unions in the State, and this plan has since been consistently followed, 
so that at the present time a series of comparable statistics based on 
reports from labor organizations for the period 1908 to the close of the 
third quarter in 1916 is now available. By courtesy of the Director of 
that Bureau we are enabled in this report to present a summary of the 
information thus obtained in the form of a series of statistical tables, 
together with two charts, the one representing facts obtained for Massa- 
chusetts with corresponding information for the United Kingdom, Ger- 
many, and New York State, and the other showing for the principal 
industries of the State the fluctuations in unemployment in Massachusetts. 

In order that the significance of the data presented herein may be clearly 
understood, it should be pointed out that the percentages are based upon 
reports received from the secretaries of labor organizations, and have 
reference only to organized labor. The number of reports received at the 
close of September, 1916, was 1,021, representing an aggregate member- 



278 



SOCIAL INSURANCE. 



[Feb. 



ship of 180,557, or about 75 per cent of the total number of organized 
wage-earners in the Commonwealth. While the facts are believed to be 
representative of employment conditions as respects organized labor in 
the State, no claim is made by the Bureau that the facts are more than 
fairly representative of employment conditions among the entire wage- 
earning population, organized and unorganized. Some authorities hold 
that, particularly in times of depression, there is a greater amount of 
unemployment among the unorganized than among the organized wage- 
earners, while others, on the contrary, hold that the organized em- 
ployees, because of their insistence upon the maintenance of a standard 
scale of wages and hours of labor, are the first to be thrown out of em- 
ployment when an industrial depression renders it necessary for employers 
to reduce their labor costs. Whatever the relative merits of these two 
points of view, it seems reasonable to assume that, notwithstanding the 
fact that the absolute percentages of unemployment which are derived 
from trade union returns may not be fully representative of general con- 
ditions for the entire wage-earning population, nevertheless, the fluctua- 
tions in the trade union percentages may be considered as indicative of 
changes in industrial conditions, serving as a trustworthy measure of the 
unemployment prevailing at any one time. A discussion of the statis- 
tical returns and charts prepared by the Bureau of Statistics follows. 

A. Summary of Quarterly Reports received from Labor Organ- 
izations in Massachusetts during the years 1908-1916. 

The following comparative statement shows the number and member- 
ship of the organizations reporting at the close of each quarter, since the 
collection of the unemployment returns in Massachusetts was inaugu- 
rated; also the number of members unemployed, and the corresponding 
percentages. 



Table I. — Number and Membership of Organizations Reporting and Number 
of Members Unemployed, 1908-1916, with Corresponding Percentages. 



Quarters Ending — 


Number Re- 
porting. 


Unemployed — 
All Causes. 


Unemployed 

Owing to Lack 

of Work 

or Material. 




Unions. 


Member- 
ship. 


Mem- 
bers. 


Percent- 
ages. 


Mem- 
bers. 


Percent- 
ages. 


March 31, 1908 

June 30, 1908 

September 30, 1908, . 
December 31, 1908, . 

March 31, 1909 

June 30, 1909, .... 
September 30, 1909, . 
December 31, 1909, . . . 

March 31, 1910, .... 

June 30, 1910 

September 30, 1910, . 
December 31, 1910, . 


256 
493 
651 

770 

777 
780 
797 
830 

837 
841 
845 
862 


66,968 
72,815 
83,969 
102,941 

105,059 
105,944 
113,464 
107,689 

117,082 
121,849 
118,781 
122,621 


11,987 
10,490 
8,918 
14,345 

11,997 

6,736 
5,451 
10,084 

8,262 
8,518 
6,624 
12,517 


17.9 
14.4 
10.6 
13.9 

11.4 
6.4 
4.8 
9.4 

7.1 
7.0 
5.6 
10.2 


10,832 
9,128 
7,349 

11,302 

9,980 
4,913 

3,873 
5,248 

6,186 
6,570 

4,687 
8,938 


16.2 
12.5 
8.8 
11.0 

9.5 
4.6 
3.4 
4.9 

5.3 
5.4 
4.0 
7.3 



1917. 



HOUSE — No. 1850. 



279 



Table I. ■ — Number and Membership of Organizations, etc. — Concluded. 












Unemployed 




Number Re- 


Unemployed — 


Owing to Lack 




porting. 


All Causes. 


of Work 


Quarters Ending — 










or Material. 




Unions. 


Member- 


Mem- 


Percent- 


Mem- 


Percent- 




ship. 


bers. 


ages. 


bers. 


ages. 


March 31, 1911 


839 


122,002 


12,738 


10.4 


9,120 


7.5 


June 30, 1911, .... 


897 


135,202 


8,927 


6.6 


5,669 


4.2 


September 30, 1911, . 


975 


133,540 


7,527 


5.6 


4,904 


3.7 


December 30,i ign, . 


905 


125,484 


12,167 


9.7 


7,568 


6.0 


March 30,i 1912, 


942 


161,825 


22,738 


2 14.1 


8,185 


5.1 


June 29/ 1912, .... 


974 


134,940 


7,088 


5.3 


4,540 


3.4 


September 30, 1912, . 


972 


146,673 


6,952 


4.7 


4,407 


3.0 


December 31, 1912, . 


994 


174,359 


15,914 


9.1 


11,164 


6.4 


March 31, 1913 


1,022 


170,970 


19,329 


11.3 


12,493 


7.3 


June 30, 1913 


1,037 


172,343 


11,116 


6.4 


7,473 


4.3 


September 30, 1913, . 


1,059 


177,267 


12,010 


6.8 


7,537 


4.3 


December 31, 1913, . 


1,081 


178,182 


18,574 


10.4 


13,069 


7.3 


March 31, 1914, .... 


1,082 


173,327 


22,347 


12.9 


15,917 


9.2 


June 30, 1914 


1,095 


183,202 


18,122 


9.9 


12,576 


6.9 


September 30, 1914, . 


1,010 


166,816 


18,302 


11.0 


14,140 


8.5 


December 31, 1914, . 


1,024 


165,762 


30,258 


18.3 


24,629 


14.9 


March 31, 1915 


1,076 


171,997 


28,486 


16.6 


21,951 


12.8 


June 30, 1915, .... 


1,092 


162,315 


17,262 


10.6 


12,241 


7.6 


September 30, 1915, . 


1,052 


175,754 


12,328 


7.0 


6,325 


3.6 


December 31, 1915, . 


1,026 


168,122 


14,389 


8.6 


6,709 


4.0 


March 31, 1916 


1,029 


178,434 


15,484 


8.6 


7,010 


3.9 


June 30, 1916 


1,017 


173,179 


7,358 


4.2 


2,323 


1.3 


September 30, 1916, . 


1,021 


180,557 


7,046 


3.9 


3,358 


1.9 


Average for 1908, 


_ 


_ 


_ 


14-2 


_ 


12.1 


Average for 1909, 


- 


- 


- 


8.0 


- 


5.6 


Average for 1910, 


- 


- 


- 


7.5 


- 


5.5 


Average for 1911, 


- 


- 


- 


8.1 


- 


5.4 


Average for 1912, 


- 


- 


- 


8.3 


- 


4.5 


Average for 1918, . 


- 


- 


- 


8.7 


- 


5.8 


Average for 1914, 


- 


- 


- 


13.0 


- 


9.9 


Average for 1915, 


- 


- 


- 


10.7 


- 


7.0 


Average for 1916, 


" 


" 


" 


~ 


— 





In the above table, facts are presented not only with reference to the 
percentages of unemployed for all causes, but also the percentages rep- 
resenting the numbers unemployed because of lack of work or material. 
The latter percentages indicate more adequately the condition of the 
labor market than the former, because such factors as unfavorable weather, 
strikes and lockouts, disability, and other causes, which have no special 
significance as indices of general prosperity or depression, are eliminated. 
For this reason the percentages unemployed owing to lack of work or ma- 
terial may more properly be discussed in this connection* 

On reference to the last column in the above table, it will be observed 
that the percentage (16.2) unemployed at the close of March, 1908, because 
of lack of work or material was the highest percentage recorded during 
the entire period 1908-1916, indicating that the industrial depression 



1 Owing to the fact that the respective dates — December 31, 1911, March 31, 1912, and June 30, 
1912 — ■ fell on Sunday, the date chosen for the returns in each case was the day preceding. 

2 In explanation of this unusually high percentage unemployed for all causes it should be stated 
that over 9,000 organized textile workers in Lowell who were involved in a strike pending on 
March 30 were included in the aggregate number reported as unemployed on that date. 



280 



SOCIAL INSURANCE. 



[Feb. 



during the winter of 1907-1908 was rather more severe than that of the 
winter of 1914-1915, when the corresponding percentage for the close of 
December, 1914, was 14.9, and for the close of March, 1915, was 12.8. 
Another significant fact brought out by the percentages is that the per- 
centages for the close of December and March in each year are uniformly 
higher than the corresponding percentages for the close of June and 
September of the respective years. This fluctuation represents seasonal 
inactivity which is confined largely to the building trades. 

B. Causes of Unemployment. 

In Table II an endeavor has been made to analyze the unemployment 
statistics so as to show the relative weight which the number of unem- 
plo}^ed for any single cause bears in the aggregate number of unemployed. 

Table II. — Percentage Unemployed, 1908-1916: By Causes. 



Quarters Ending 



All 

Causes. 



Lack of 
Work or 
Material. 



Unfavor 

able 
Weather. 



Strikes 

or 

Lockouts 



Dis- 
ability. 



Other 
Causes. l 



March 31, 1908, . 
June 30, 1908, . 
September 30, 1908, 
December 31, 1908, 

March 31, 1909, . 
June 30, 1909, . 
September 30, 1909, 
December 31, 1909, 

March 31, 1910, . 
June 30, 1910,- . 
September 30, 1910, 
December 31, 1910, 

March 31, 1911, . 
June 30, 1911, . 
September 30, 1911, 
December 30,* 1911, 

March 30, * 1912, . 
June 29,' 1912, . 
September 30, 1912, 
December 31, 1912, 

March 31, 1913, . 
June 30, 1913, . 
September 30, 1913, 
December 31, 1913, 

March 31, 1914, . 
June 30, 1914, . 
September 30, 1914, 
December 31, 1914, 

March 31, 1915, . 
June 30, 1915, . 
September 30, 1915, 
December 31, 1915, 

March 31, 1916, . 
June 30, 1916, 
September 30, 1916, 



17.9 
14.4 
10.6 
13.9 

11.4 
6.4 
4.8 
9.4 

7.1 

7.0 

5.6 

10.2 

10.4 
6.6 
5.6 

9.7 

14.1 
5.3 
4.7 
9.1 

11.3 
6.4 
6.8 

10.4 

12.9 
9.9 
11.0 
18.3 

16.6 

10.6 
7.0 
8.6 

8.6 
4.2 
3.9 



16.2 
12.5 
8.7 
11.0 

9.5 
4.6 
3.4 

4.9 

5.3 
5.4 

4.0 
7.3 

7.5 
4.2 
3.7 
6.0 

5.1 
3.4 
3.0 

6.4 

7.3 
4.3 
4.3 
7.3 

9.2 
6.9 
8.5 
14.9 

12.8 
7.6 
3.6 

4.0 

3.9 
1.3 
1.9 



0.2 
0.1 

20.0 

0.5 
0.1 

20.0 

0.1 
2.4 

0.1 

20.0 

0.1 
1.2 

0.7 
0.2 
0.2 
1.6 

1.0 

20.0 

0.1 
0.6 

0.5 
0.1 
0.5 

0.7 

0.7 
0.3 
0.2 
1.1 

0.4 
0.7 
0.6 
1.1 

1.0 
0.3 
0.1 



0.7 
0.3 
0.5 

0.7 

0.2 
0.3 
0.1 
0.1 

0.1 
0.1 
0.1 
0.1 

0.1 
0.5 
0.3 
0.1 

6.3 
0.4 
0.3 
0.6 

1.6 
0.7 
0.6 
0.5 

0.6 
0.7 
0.5 
0.1 

1.0 
0.6 
1.2 
1.5 

1.9 
0.8 
0.3 



0.7 
1.2 
1.2 
1.2 

1.3 
1.2 
1.1 

1.2 

1.4 
1.2 
1.3 
1.2 

1.4 
1.2 
1.2 
1.3 

1.3 
1.3 
1.2 
1.2 

1.4 
1.2 
1.2 
1.4 

1.6 
1.2 
1.5 
1.5 

1.9 
1.5 
1.4 
1.8 

1.6 
1.5 
1.5 



0.2 
0.3 
0.1 
0.4 

0.7 
0.5 
0.2 
0.7 

0.4 
0.2 
0.1 
0.3 

0.5 

0.1 
0.2 
0.5 

0.8 
0.8 
0.3 

0.7 

0.5 
0.2 
0.2 
0.2 

0.2 
0.3 
0.1 



1 Including vacations, temporary shut-downs for repairs, stock-taking, etc. 

2 Less than 0.05 per cent. 

• Owing to the fact that the respective dates — December 31, 1911, March 31, 1912, and June 30, 
1912 — fell on Sunday, the date chosen for the returns in each case was the day preceding. 



1917.] HOUSE — No. 1850. 281 

The principal cause of unemployment at the close of each quarter, as 
shown in the table, is almost invariably lack of ivork or material, and as 
has already been stated, these percentages indicate primarily the condi- 
tions of the labor market, and special significance may, therefore, be at- 
tached to the fluctuations observed. 

The percentages unemployed on account of weather usually show but 
little fluctuation except at the end of the last quarter, and occasionally 
at the close of the first quarter of each year. 

Except for the high percentage (6.3) unemployed on account of strikes 
or lockouts at the close of March, 1912 (due principally to a succession 
of strikes of textile workers, of which those in Lawrence and Lowell are 
most memorable), there were no considerable fluctuations in these per- 
centages during the period under consideration. In no other instance 
did the percentage unemployed for this cause exceed 1.9 — the percentage 
for the close of March, 1916. 

C. Unemployment in Municipalities. 

On examination of the percentages unemployed for the leading cities 
in the State, it appears that in Boston, which city ordinarily includes 
fully one-third of the total membership reporting each quarter, and in 
which there is a fairly general representation of all organized industries 
and occupations in the State, the percentages unemployed correspond 
rather closely with the percentages unemployed for the State as a whole. 
The usual increase in unemployment during the winter months, which 
is reflected in the percentages for the State as a whole, is true also of the 
percentages for the city of Boston. With few exceptions, however, the 
other leading cities in the State show no uniform correspondence of this 
nature; in fact, in those cities which are industrially more specialized, 
practically no uniformity whatever will be observed, the percentages un- 
employed in any such specialized city rising and falling usually with the 
rise and fall of the percentages of unemployment in the major industry 
of that city. In Table III are presented data on which these conclusions 
are based. 



282 



SOCIAL INSURANCE. 



[Feb. 



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1917.] 



HOUSE — No. 1850. 



283 



13.6 
12.0 
19. 3« 
19. 4« 


OC •**< CO 


OCtOON 


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9.7 
4.4 
5.2 
12.4 


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14.2 
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284 



SOCIAL INSURANCE. 



[Feb. 



D. Unemployment in Various Industries. 

The percentages unemployed in the several industries do not correspond 
closely with the percentages for all industries, except in the case of the 
building trades, which include each quarter a fairly large proportion of 
the aggregate membership represented by the returns; and for all of the 
principal industries there may be noted a wide range of unemployment. 

In the following table are shown, for the period under consideration, 
the percentages unemployed in the six leading industries at the close of 
the respective quarters. 

Table IV. — Percentage of Member ship Unemployed (All Causes) at the 
Close of Each Quarter, 1908-1916: By Principal Industries. 









Boot and 




Trans- 
portation 

(Steam 

and 
Electric). 


Iron and 


Printing 


Quarters Ending — 


All In- 
dustries. 


Building 
Trades. 


Shoe 
Manufac- 


Textiles. 


Steel 
Manufac- 


and 
Allied 








turing. 




turing. 


Trades. 


March 31, 1908, . 


17.9 


25.2 


8.0 


43.9 


13.3 


16.6 


9.0 


June 30, 1908, . 


14.4 


18.3 


18.2 


13.6 


8.9 


17.8 


10.5 


September 30, 1908, . 


10.6 


9.3 


17.1 


15.5 


4.8 


16.0 


12.6 


December 31, 1908, . 


13.9 


21.2 


6.4 


20.9 


5.7 


16.3 


9.4 


March 31, 1909, . 


11.4 


18.5 


12.8 


6.7 


4.3 


9.8 


6.4 


June 30, 1909, . 


6.4 


5.0 


8.0 


6.9 


3.7 


7.6 


5.6 


September 30, 1909, . 


4.8 


3.1 


7.1 


5.1 


2.9 


3.5 


4.4 


December 31, 1909, . 


9.4 


17.8 


3.3 


12.6 


2.2 


10.9 


3.6 


March 31, 1910, . 


7.1 


8.9 


7.4 


8.7 


5.2 


4.2 


3.6 


June 30, 1910, . 


7.0 


4.2 


9.6 


17.9 


4.9 


3.9 


3.8 


September 30, 1910, . 


5.6 


4.5 


7.9 


7.5 


3.1 


5.0 


3.7 


December 31, 1910, . 


10.2 


18.0 


5.0 


8.6 


4.0 


14.3 


4.0 


March 31, 1911, . 


10.4 


19.3 


12.0 


9.7 


4.1 


6.3 


4.6 


June 30, 1911, . 


6.6 


6.4 


4.4 


21.3 


2.8 


13.4 


4.5 


September 30, 1911, . 


5.6 


5.0 


4.5 


11.9 


2.4 


7.5 


6.6 


December 30,i ign, . 


9.7 


20.9 


2.3 


7.5 


3.0 


12.6 


6.0 


March 30,i 1912, 


14.12 


17.0 


13.9 


29. I 2 


1.9 


7.8 


5.7 


June 29,i 1912, . 


5.3 


2.7 


8.3 


2.4 


2.6 


10.7 


5.4 


September 30, 1912, . 


4.7 


2.5 


9.2 


5.3 


1.9 


10.5 


3.9 


December 31, 1912, . 


9.1 


14.9 


4.6 


12.9 


3.2 


11.9 


3.7 


March 31, 1913, . 


11.3 


13.4 


14.9 


14.7 


3.9 


7.4 


2.9 


June 30, 1913, . 


6.4 


7.9 


5.5 


12.8 


2.5 


9.2 


4.5 


September 30, 1913, . 


6.8 


9.2 


6.2 


13.0 


2.1 


8.1 


4.2 


December 31, 1913, . 


10.4 


23.9 


4.0 


5.9 . 


4.1 


18.2 


5.0 


March 31, 1914, . 


12.9 


29.7 


14.4 


5.1 


3.6 


11.5 


5.0 


June 30, 1914, . 


9.9 


12.4 


12.9 


6.4 


3.5 


13.1 


9.8 


September 30, 1914, . 


11.0 


13.8 


13.3 


11.6 


4.5 


13.8 


7.8 


December 31, 1914, . 


18.3 


33.8 


14.7 


21.2 


6.8 


18.5 


12.1 


March 31, 1915, . 


16.6 


26.3 


22.4 


10.1 


8.8 


11.8 


9.8 


June 30, 1915, . 


10.6 


13.2 


10.9 


6.9 


4.4 


12.2 


10.5 


September 30, 1915, . 


7.0 


8.5 


5.5 


3.6 


3.2 


16.23 


5.7 


December 31, 1915, . 


8.6 


17.6 


2.2 


4.0 


7.0 


12.33 


5.9 


March 31, 1916, . 


8.6 


22.0 


5.1 


4.3 


3.2 


5.4 


7.9 


June 30, 1916, . 


4.2 


7.6 


3.4 


3.1 


3.8 


2.1 


3.0 


September 30, 1916, . 


3.9 


3.7 


4.7 


2.2 


4.2 


1.6 


3.7 


Mean, 


9.4 


13.4 


7 9 


8.7 


3.8 


10.5 


5.4 


Average, . 


9.4 


13.9 


8.9 


11.2 


4.3 


10.5 


6.1 



1 Owing to the fact that the respective dates — December 31, 1911, March 31, 1912, and June 30, 
1912 — fell on Sunday, the date chosen for the returns in each case was the day preceding. 

2 In explanation of this unusually high percentage unemployed for all causes it should be 
stated that over 9,000 organized textile workers in Lowell who were involved in a strike pending 
on March 30 were included in the aggregate number reported as unemployed on that date. 

3 This high percentage was due principally to the unemployment of a very large number of 
machinists in Worcester who were on strike. With the strikers eliminated the percentage for this 
group of trades would have been only 3.8 for the close of September, and 3.3 for the close of 
December, 1915. 



1917.] HOUSE — No. 1850. -285 

In the building trades the highest percentage reported unemployed 
during the period was 33.8 on December 31, 1914. Other percentages 
exceeding 20.0 were 29.7 on March 31, 1914; 26.3 on March 31, 1915; 
25.2 on March 31, 1908; 23.9 on December 31, 1913; 22.0 on March 31, 
1916; 21.2 on December 31, 1908; and 20.9 on December 30, 1911. The 
influence of the weather conditions is more marked in the building trades 
than in any group of trades, and it will be observed that in this group the 
highest percentages unemploj^ed are either for the close of December or 
March. During periods of depression, it is also true that conditions in 
the building trades are by no means satisfactory even during the summer 
and fall. 

In boot and shoe manufacturing, the highest percentages unemployed 
were 22.4 on March 31, 1915; 18.2 on June 30, 1908; and 17.1 on September 
30, 1908; but for no other quarter during the period did the percentage 
unemployed in this industry exceed 14.9 (March 31, 1913). Usually it 
will be observed that there is a slack period in the spring and another in 
the fall of the year, representing what is commonly known in the trade as 
" between seasons." 

In the textile industry, the highest percentage unemployed during the 
period was 43.9 on March 30, 1908; other high percentages were reported 
as follows: 29.1 on March 30, 1912; 21.3 on June 30, 1911; 21.2 on Decem- 
ber 31, 1914; and 20.9 on December 31, 1908. In this industry the effects 
of the industrial depression in 1907 and 1908 were very keenly felt, and, 
although there was some recovery during the second and third quarters 
of the year 1908, the high percentage, 20.9, at the close of December, 1908, 
indicated that the recovery was by no means complete even at that time. 
The very high percentage (29.1) on March 30, 1912, was due to the un- 
employment of a large number of textile workers who were involved in 
strikes on that date. In this connection, it should be pointed out that, 
owing to the comparatively small percentage organized of the aggregate 
number of textile workers in Massachusetts, the returns for this industry 
are, admittedly, very meagre. Organizations which report, however, are 
composed principally of the more skilled workmen in this industry on the 
progress of whose work depend those processes on which unskilled labor 
is principally employed. The facts, therefore, may be taken as represent- 
ative of general conditions in the industry from time to time, but no 
claim is made that they constitute an absolute index of the amount of 
unemployment throughout the entire industry at any one time. 

For transportation, in which group are included steam and electric 
railway service, the only high percentages unemployed were 13.3 on 
March 31, 1908; 8.9 on June 30, 1908; and 8.8 on March 31, 1915. Ordi- 
narily railroad employees are rather continuously employed, and the 
percentages unemployed are, therefore, usually low and fairly constant. 
Furthermore, it is a practice of the railway companies to place their em- 
ployees on " short time" rather than to reduce the force whenever condi- 
tions are such as to necessitate a curtailing of expenses during periods of 



286. SOCIAL INSURANCE. [Feb. 

depression. For this reason the comparative percentages do not indicate 
fully the measure of unemployment in this industry during such periods. 

In the iron and steel manufacturing industries, the percentages unem- 
ployed were high during the entire year 1908, and again during the de- 
pression of 1914-1915. On the other hand, since the outbreak of the 
European war in 1914, the great demand for munition workers has resulted 
in reducing the percentages unemployed almost to a minimum, and, 
except for a certain amount of unemployment due to strikes, the effects 
of which at the close of the third and fourth quarters in 1915 were reflected 
in fairly high percentages unemployed in this industry, highly satisfactory 
conditions have maintained. 

In the printing and allied trades, high percentages were reported as 
unemployed at the close of each quarter n 1908, and again during the 
depression in 1914-1915, but an examination of the unemployment per- 
centages for the period 1909 to the close of 1914 shows a comparatively 
uniform percentage unemployed at the close of each of the respective 
quarters. 

E. Unemployment in the Various Occupations. 

An examination of the statistics of unemployment in the various oc- 
cupations discloses a very wide range in the percentages unemployed. 
In the same occupation there may be at one time practically no unem- 
ployment among the members of the organizations reporting, while at 
another time the percentage may reach a high figure. A comparison of 
the percentages for one occupation with those of another may also disclose 
a wide variation in the amount of unemployment in the occupations 
compared. Again, in certain occupations the percentages unemployed 
may continue fairly constant for a long period, then abruptly rise to a 
high point. For the occupations in the building trades (carpenters, 
bricklayers, painters, etc.) much seasonal unemployment is usually re- 
ported at the close of March and December in each year. 

While the percentages of unemployment by occupations may prove of 
comparative value in certain instances, they should be used with caution, 
particularly where comparisons are made between percentages in those 
occupations for which, owing to the small number of employees reporting, 
the returns may not have been properly representative. On the whole, 
comparisons based on percentages unemployed in the several more im- 
portant industries are to be recommended in preference to comparisons 
on an occupational basis. 

Percentages in detail by occupations for the period 1908-1916 are pre- 
sented in Table V below. 



1917.! 



HOUSE — No. 1850. 



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288 



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290 SOCIAL INSURANCE. [Feb, 



E. Discussion of Charts. 

For a long period of years the principal European countries have col- 
lected and published statistics relative to unemployment. Owing to the 
varying methods of collecting these statistics, and the differing sources 
from which they are obtained, the absolute figures for the several countries 
are not directly comparable with the similar data obtained in Massachu- 
setts and New York State, but they majr be used in plotting curves show- 
ing the fluctuations in unemployment in the several countries during a 
period of years. For purposes of making such comparison, the Bureau 
of Statistics has prepared the chart appearing on the following page, 
showing graphically the extent to which the periods of industrial prosperity 
and depression in Massachusetts and New York State correspond with 
those in the United Kingdom and Germany. An examination of the 
chart shows a remarkable correspondence in the fluctuations of the sev- 
eral curves, but it will be observed that the fluctuations in the curves 
representing the returns for Germany and the United Kingdom are by 
no means as violent as the corresponding fluctuations in the curves rep- 
resenting the conditions in Massachusetts. This, no doubt, may' be ex- 
plained by the fact that the British and German returns refer to far larger 
numbers of employees than do the retails for Massachusetts, and, con- 
sequently, a large variation in the number unemployed in a few industries 
does not affect the general percentages in the one case as noticeably as in 
the other. 

The percentages used in plotting the Massachusetts curves, of which 
there are two, — the one representing unemployment for all causes (the 
heavy unbroken line) and the other representing the percentages unem- 
ployed because of lack of work (the heavy line of dashes) — have already 
been discussed in some detail, but certain significant facts are brought 
out by the fluctuations in these curves. Thus the curve representing un- 
employment for all causes shows, in general, a downward inclination from 
the high point in 1908 following the period of industrial depression until 
the end of the third quarter in 1911, interrupted, however, by upward 
fluctuations during the winter period of each year. In the Spring of 1912 
it rose rapidly upward, this being due to the effect of the strikes of very 
large numbers of textile workers, including those which occurred at that 
time at Lawrence and Lowell. By the close of September, 1912, conditions 
had become much more normal, but after the close of 1912 the curve 
showed, in general, an upward trend until, at the close of December, 1914, 
it reached the highest point recorded during the entire period. In 1915, 
there began again a period of prosperity which is indicated by the down- 
ward trend of the curve during that year. The facts for the first three 
quarters in 1916 are not represented on the charts, but in this connection 
it may be stated that at no time during the entire period 1908 to 1915 
have the percentages for the State as a whole been as low as during the 
year 1916. The curve representing unemployment for lack of work fol- 



1917.1 



HOUSE — No. 1S50. 



291 



lows closely the trend of the curve for all causes already described, and at 
a fairly constant distance below the former curve. A marked exception 



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to this rule is found at a high point reached at the close of March, 1912, 
by the curve for all causes, due to the unemployment directly and in- 
directly resulting from the series of textile strikes to which reference has 
been made. 



292 SOCIAL INSURANCE. [Feb. 

While no comparison of the general level of the several curves can be 
safely made, owing to the varying nature of the returns on which they 
have been based, it may be proper to add that the generally high level of 
the two curves for New York State has been attributed to the relatively 
large representation in the returns for that State of certain trades in which 
usually there is apt to be considerable unemployment, as, for example, 
in the garment trades in New York City. 

For purposes of showing the fluctuations in unemployment in the prin- 
cipal industries of the State, the chart appearing on the following page 
has been prepared. In general, the curves for the six principal industries 
follow the trend of the curve representing the fluctuations of unemploy- 
ment in all industries. For convenience in making the comparison, the 
curve representing unemployment in all industries for all causes has been 
again reproduced on the second chart, and it appears at the bottom of 
the chart. 

Attention may be called to the more significant facts brought out by 
the fluctuations in the curves for the respective industries. Thus in the 
case of the building trades, one will observe the effect of seasonal inactivity 
due to unemployment during the winter months. In boot and shoe manu- 
facturing, " between seasons" periods are represented by high points 
occurring quite uniformly in the spring of the year. In textile manufac- 
turing no special uniformity in fluctuations will be observed. The high 
point in the spring of 1912 represents for this industry the unemployment 
due to strikes in the principal textile centers to which reference has alreadj^ 
been made. The curve representing unemployment in transportation, with 
the exception of fluctuations upward at times of depression, shows uni- 
formly a low percentage unemployed. 

In iron and steel manufacturing, marked fluctuations may be noted, and 
the effect of industrial depression likewise is to be observed. In the print- 
ing and allied trades, as is true of transportation, no marked fluctuations 
are to be observed, except those which are due to periods of industrial 
depression. 

By way of general summary, it may be stated that the transportation 
industry, and the printing and allied trades show usually less unemploy- 
ment than any of the other trades, and even in times of depression, the 
proportion of wage-earners thrown out of work as represented by the 
percentages and by the upward fluctuations in the curves, is by no means 
as large as in the case of the other industries. These facts throw some 
light upon the question as to which industry should be the first to receive 
consideration, were the State to establish any system of unemployment 
insurance, or to provide for the regularization of industry, and, if the 
returns made by labor organizations are to be taken as representative of 
conditions generally throughout the Commonwealth, the industries which 
should receive first consideration, in the order of their relative importance 
from the standpoint of the unemployment problem, would appear to be 



1917.1 



HOUSE — No. 1850. 



293 



Chart II. — Percentages of Trade Union Members Unemployed in Massa- 
chusetts, 1908-1915: By Principal Industries. 



1909 I9IO 1911 1912 1913 1914 I9IS 1916 1917 

















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as follows :7(l)|Building trades; (2) textile manufacturing; (3) boot and 
shoe manufacturing; (4) iron and steel manufacturing; (5) printing and 
allied trades, arid (6) transportation. 



294 



SOCIAL INSURANCE. 



[Feb. 



Chart III. — Relation between Unemployment and Crimes against Property . 

Note — In the chart below, the curve with reference to sentences for crimes against property 
has been superimoosed upon the curve representing the fluctuations in unemployment during 
the period 1908-1915. It will be observed that the fluctuations in each of the two curves corres- 
pond in a measure, indicating that there is some relationship between criminality and unem- 
ployment It is a matter of general knowledge that during times of depression the number ot 
arrests on account of vagrancy and minor thefts is much greater than during times of prosperity. 
The sentences for these causes (vagrancy and minor thefts) are included in the classification 
"Sentences for crimes against property, 1 ' but the data with reference to such crimes are not 
classified in such detail as to permit of a segregation of the sentences for vagrancy and minor 
thefts. In making the comparison, therefore, between the two curves, it should be borne in mind 
that the correspondence in fluctuations is merely indicative, not conclusive, evidence as to the 
relationship between crime and unemployment. 



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1917.1 HOUSE — No. 1850. 295 



MEMORANDUM FOR THE SUBCOMMITTEE ON UNEMPLOY- 
MENT OF THE COMMISSION ON SOCIAL INSURANCE. 

Confirming my views as expressed to the committee some time since 
bearing upon the means and opportunities for increased usefulness of the 
Public Employment Offices, I beg to say that if the legislature should feel 
that the private offices ought to be brought at this time under some form 
of central state supervision and licensing, such a function ought not to 
be placed upon the Bureau of Statistics, as it is more nearly analogous 
to the work of the State Board of Labor and Industries; and if it should 
be decided to add to the State's functions in this respect, it will probably 
be considered logical to transfer jurisdiction over the State Employment 
Offices to the board charged with the duty of supervising the private 
agencies. To such a transfer, under the circumstances, I could offer no 
objection. On the merits of the question as to whether the State ought 
or ought not to assume jurisdiction over the private agencies, this ap- 
pears to be wholly a matter of public policy to be determined by the 
Legislature and with respect to which I have not felt it within my official 
province to express an opinion. 

Regardless, however, of whether the State is to assume any supervisory 
jurisdiction over the private employment offices and regardless, also, of 
the question as to whether the state offices should be transferred to some 
other jurisdiction or remain under the control of the Director of the 
Bureau of Statistics, I feel very strongly that the time has come when 
something must be done to increase the efficiency and opportunities for 
usefulness of the state offices to the public. If, therefore, it should not 
be deemed desirable for any reason, either ultimately or at the present 
time, to transfer the state offices to some other department, and the re- 
sponsibility for their management and development is to remain with the 
Director of the Bureau of Statistics, he should be given a certain amount 
of increased authority and opportunity to develop them along lines of 
increased usefulness to the community, and the means, through increased 
appropriations and other legislation as may be necessary to enable him 
to accomplish this result. No very radical changes in the existing statute 
providing for the establishment and maintenance of the state offices would 
be necessary for this purpose; provision, however, should be made sub- 
stantially for the following : — 

,1. Authority to appoint a competent person who can devote his entire 
time to supervising the state offices, keeping in touch with the public, and 
studying, and accumulating data concerning the whole employment prob- 
lem. It may be that the Director of the Bureau has authority under the 
general terms of the present law to make such an appointment, but the 
amount necessary to pay the additional salary would presumably be more 
readily appropriated if the authority to create such a position be specifically 
provided for in the statute. 



296 SOCIAL INSURANCE. [Feb. 

2. Authority to appoint a general advisory council to advise with respect 
to the management of the offices in general, and separate advisory com- 
mittees for the office in each city, it being the intention that the mem- 
bership of such bodies be composed of representatives of employers and 
employees, the public school system, and perhaps other particular interests 
in the community. 

3. Authority specifically provided for by law to develop co-operation 
with the school authorities in order that there may be unity of effort 
between the latter and the employment offices in the placement of juve- 
niles in suitable employment, until such time as this function is entrusted 
by statute entirely to the school officers. 

4. Broader opportunity to procure a higher grade of expert service than 
seems feasible under the operation of the Civil Service regulations, by 
providing for a modification of the same in certain cases with the approval 
of the Governor and Council. 

I am enclosing herewith the draft of a bill intended to accomplish these 
purposes. If it should meet with the approval of your commission and 
you could see your way clear to recommend a measure along these line's, 
I am sure it would be a very helpful contribution to the result I think we 
would all like to see accomplished, namely, an increase in the capacity 
for usefulness of the state offices to the community. 

As bearing upon the need of better financial support for the state offices 
in the interest of increased efficiency, I would like to call your attention 
to the facts as respects appropriations for their maintenance. My esti- 
mate a year ago, based upon a conservative appraisal of the needs of the 
four offices for the year 1916, and without contemplating any compre- 
hensive plan of expansion, was $36,905. This the Legislature reduced to 
$36,000. By rigorously confining expenditures to the absolute necessities 
of routine requirements, the year closed with an unexpended balance of 
$12.48. In my budget for 1917, I asked for a total of $40,325, or $4,325 
more than was appropriated in 1916. This has been reduced by $3,825 
in the appropriation bill which has now passed the Legislature and while 
it leaves the amount appropriated $500 above last year's appropriation, 
the latter was inadequate and I shall be able to conduct the offices at 
Boston, Springfield, and Worcester — after closing the Fall River office, 
which I am now planning to do — upon the amount provided, $36,500, 
only by the most rigid economies, which can be exercised, I fear, only at 
the expense of efficient service. 

CHARLES F. GETTEMY, 
Director, Bureau of Statistics. 

February, 6, 1917. 



1917.] HOUSE — No. 1850. 297 

MEMORANDUM IN RE UNEMPLOYMENT RELIEF. 
Introductoky. 
Unemployment is a by-product of industrial mismanagement and is 
most prevalent during and immediately following an industrial depression. 
Makeshift relief measures such as the establishment of soup kitchens, the 
use of public buildings and churches as lodging houses, the creation of 
bread lines and other hastily devised methods of caring for the unem- 
ployed, are merely palliative, pauperizing those aided without affording 
any remedy for the fundamental defects in the industrial organization 
of society. Nor will the multiplication of employment agencies, either 
public or private, make possible the furnishing of "jobs" to all who apply, 
especially during a period of industrial depression, when there are insuf- 
ficient jobs to be had. 

The Furnishing of Work for the Unemployed. 
In addition to providing the means whereby the worker can be directed 
to employment when it is available, the State should guarantee to all who 
honestly seek employment an opportunity of earning a livelihood. To the 
extent that private enterprise fails to provide continuous employment, 
the State should make provision for the conservation of the surplus of 
labor by furnishing employment to the worthy unemployed, yet on terms 
such as would not attract labor from private industry. 

Procedure. 

So far as possible, industries of a non-competitive character should be 
selected as the field in which "relief works" are to be established during 
periods of industrial depression. During periods of normal prosperity, 
it would be necessary merely to maintain the administrative machinery 
for the management of such relief works, so that they could be put into 
operation immediately when it shall have been determined that there is 
any considerable amount of unemployment prevailing. Already a notable 
precedent has been established in this State in the matter of furnishing 
work to the unemployed. In 1915 nearly $100,000 was appropriated by 
the State to be used for this purpose, and an additional amount of over 
$14,000 was contributed to the fund by private individuals. This fund 
was expended for moth suppression, forest fire prevention, forest thinning, 
and other branches of foresters' work. Thus a direct return to the State 
resulted coincidently with the relief of the able-bodied unemployed who 
engaged in this work. But at any time during a depression such as that 
in 1915, there are many people who are physically unable to engage in 
work of this character, and obviously some provision should be made 
for the employment of men who are not fitted for out-door work and for 
women who form an increasingly large percentage of our industrial pop- 
ulation. The relief works, therefore, should be sufficiently varied to meet 
more adequately the needs of all classes of the unemployed and particu- 



298 SOCIAL INSURANCE. [Feb. 

larly the need of those who are handicapped — the first persons to be 
thrown out of work. 

Hence appears the need of a permanent administrative body which shall 
determine the industries in which relief works should be established and 
which body should be prepared to operate such works. This function 
should be delegated to that department of the Commonwealth which 
may eventually have charge of the administration of the State Public Em- 
ployment Offices and to which body the supervision of private employ- 
ment offices should also be delegated. It is obvious that the administrator 
of the employment offices of the State would have an immediate knowledge 
of the actual conditions in the various industries, the industries in which 
unemployment is most prevalent, and at the same time be in a position 
to co-ordinate these several functions in such manner as best to insure 
the carrying out of a comprehensive, unified plan for the relief of the un- 
employed. Because of the importance of the administrative work which 
would be entailed, and also because of the fact that the character of the 
work would not be closely related to that of any other of the adminis- 
trative departments of the Commonwealth, it is suggested that a State 
"Board of Employment" be established which would administer the, 
present Public Employment Offices and such others as may be estab- 
lished rather than that these added functions should be delegated to any 
existing department. 

Cost of Administeation. 
The administration of the Public Employment Offices might, as hereto- 
fore, be provided for by direct State appropriation, but the cost of that 
branch of work which relates to the relief of the unemployed might well 
be met by setting aside during years of prosperity an unemployment 
reserve fund to be used during periods of depression. Furthermore, con- 
siderable additions to the fund for the relief of the unemployed might be 
secured in the nature of private contributions, as in 1915, when it was 
provided that contributions might be accepted as additions to the fund 
for the relief of the unemployed. Possibly also, large bequests might be 
made to swell the fund. Nor is it by any means a foregone conclusion 
that the relief works, such as the reclamation of lands, reforestation, etc., 
if properly conducted, would not eventually afford to the Commonwealth 
a fair return upon the investment, whereas the granting of unemployment 
insurance would be a constant charge upon the Commonwealth to the 
extent that subsidization by the State might be required. 

Respectfully submitted, 

October 3, 1916. ROSWELL F. PHELPS. 

Note. — This memorandum has been submitted as a statement of my 
personal views, and should not be considered as, in any measure, reflecting^ 
the policy of the Massachusetts Bureau of Statistics with which I am 
officially connected. 



1917.] HOUSE — No. 1850. 299 



AN ABSTRACT OF THE STATEMENT OF H. J. SKFFFINGTON, 
RELATIVE TO THE UNITED STATES EMPLOYMENT SERV- 
ICE. 

The Employment Service, now an established agency of the Department 
of Labor, is engaged in promoting a beneficial distribution of wage -earning 
labor throughout the United States by advancing opportunities for profit- 
able employment. 

This Service was established in 1907 and has been extended so that at 
present there are offices in all the large cities of the country with activities 
in every state; the country being divided into twenty zones, each zone 
having a central office. One of the primary objects of the Service is to 
balance the nation's workers, to distribute them and thus in a measure 
tend to prevent the local derangements in the labor market, for experience 
has shown that there has often been a scarcity of workers in some parts 
of the country, and more workers than were needed in other parts. 

Not until the early summer of 1914, about 15 months after the creation 
of the Department of Labor, did the larger work of this Service begin, 
but the rapidity of its growth is evidenced by the fact that at the present 
time there is a chain of Federal labor exchanges which beneficially serves 
the employment needs of the wage-earning population of the United 
States. Of course employers also are beneficially served by the same 
processes, for the benefits of employment facilities are reciprocal in effect. 

These various offices are also in a measure a sort of clearing-house of 
information. The officers become acquainted with the industrial situation 
and do all they can in maintaining normal business conditions within 
the state by means of newspaper articles, personal visits to employers 
and addresses before organizations of manufacturers, farmers and other 
vocational societies. 

In furtherance of the work the Department has the co-operation of the 
Postoffice and Agricultural Departments as well as the Department of the 
Interior and the Department of Commerce. It has been greatly assisted 
by the peculiar advantages which the postal authorities have been able 
to provide, as some 60,000 postoffices were early brought into co-operative 
relations with the Employment Service. 

Either an employer or workman may obtain at any postoffice in the 
United States a blank application supplied by the Department, which 
after filling out and signing, may be deposited in the mails anywhere free 
of postage. I,n some cases the postmasters can bring the parties together 
without forwarding their applications, but otherwise all applications are 
transmitted to the nearest station or sub-station of the Labor Depart- 
ment. There they are compared for the purpose of noting reciprocal 
requirements and bringing the work-seeker and manufacturer together. 
This is done as completely as possible at each station and sub-station. 
Applications which remain unmatched are transmitted to the Division of 



300 SOCIAL INSURANCE. [Feb. 

Information at Washington, and such of them as then remain unmatched 
are bulletined to all stations and sub-stations with a view to their being 
matched at one or another of them. 

Large employers of labor desirous of obtaining laborers, mechanics, 
clerks or bookkeepers thus have a direct means of getting the men they 
require. They can write to Washington or to their postmaster or can 
speak to their postman and rural carriers. Blanks will be sent them at 
once to be filled out by themselves and thus the machinery of the Gov- 
ernment is immediately put in operation for their benefit. Men out of 
employment follow the same method. They state what they want and 
an endeavor is made to place them in employment, preferably in the com- 
munities where they live. The service performed is absolutely free to 
employees and employers alike. 

The co-operation of the Department of Agriculture is important, for 
three or four Bureaus in that Department have extensive official commu- 
nication with agriculturists in every section and representatives in nearly 
every county in the United States. The total number of its officers and 
representatives in the field serving in various capacities is something like 
170,000, and their services can be secured not only to enlist farmers in 
the movement, but to carry on investigations of special cases, obtaining 
information regarding farmers who apply for farm help, and in many other 
ways serve in an advisory capacity in their respective districts. 

The importance of co-operation between the Federal Government and 
all the states and cities of the United States was recognized at an early 
stage in the development of the U. S. Employment Service, its policy 
being to co-operate with all states and municipal establishments organ- 
ized in whole or in part for the welfare of wage-earners, including official 
employment bureaus, in carrying out plans for a beneficial distribution 
of wage earning laborers. 

In order to secure the confidence and co-operation of public employ- 
ment agencies in states and cities, the Department called its first national 
conference of federal, state and municipal officials engaged in labor dis- 
tribution. The formal call was made April 26, 1915, by the Secretary of 
Labor. It was addressed to all state and municipal officials engaged in 
or responsible for distribution of labor within their respective spheres, 
including the Governor of each state. Pursuant to that call the conference 
met in San Francisco on August 2, 1915, and remained in session the 
greater part of five days, and there the plans of the Federal Government 
on this matter were set forth. It was attended by official representatives 
of public employment offices from widely scattered centers of national, 
state and city employment services. The primary, object of the con- 
ference was to bring its representatives into friendly consultation. The 
whole subject of co-operation of public employment agencies was frankly 
discussed and mutual understandings over points of difference and possible 
friction were arrived at in a friendly spirit. One of the results of the con- 
ference was the Creation of an advisory board consisting of 12 members, 



1917.] HOUSE — No. 1850. 301 

four chosen by the municipal delegates, four by the state delegates and 
four by the Secretary of Labor. The New England representative on 
this board is G. Harry Dunderdale of the State Emplojmient Bureau of 
Boston. This board is regarded by the Department as a constant com- 
mittee to give advice on theories and methods of employment service, 
which the Secretary of Labor has invited to co-operate with the Depart- 
ment of Labor in an advisory capacity. It has no directive authority. 

In accordance with its previously reported policy and in the spirit of 
the national conference at San Francisco, the Department has effected 
co-operative arrangements with several state and city public employ- 
ment agencies, and there has been a steady growth in sentiment through- 
out the country in favor of the extension of the service. States and mu- 
nicipalities have organized existing systems on a more effective basis, and 
many of these have joined in a co-operative system with the Department 
of Labor in furtherance of the work. 

At New York the proposition was favorably received by both state and 
city authorities, in consequence of which the first experiment in Federal- 
State-City co-operation began there. It is still, however, in the experi- 
mental stage. Further stages of advancement have been secured in 
Missouri, with headquarters at Kansas City, while a considerable advance 
has been made in a number of the other larger states. 

One of the difficulties likely to be encountered in this co-operative 
work is the embarrassments incident to a seeming detail of officials of one 
independent branch of the Government (federal, state or municipal) to 
service under the orders of another branch. No such subordination has 
been intended or involved, and the arrangement in Pennsylvania contains 
a feature of special value to overcome just such a difficulty. There they 
have an Executive Commission to administer the whole co-operative 
service, and an Emplojonent Committee under it to carry on the routine 
work. By this arrangement an employee detailed by the Department 
for the routine work of co-operative employment service acts as a member 
of the Employment Committee, state and city employees being the other 
members. They, therefore, work together on an equality basis instead 
of appearing to work as superiors and subordinates. 

In this development it has not been the purpose of the Bureau, acting 
in employment matters, to displace the state and municipal efforts in 
this field, but rather to add and supplement their work in this direction. 
What the Bureau is desirous of obtaining is an active scheme of co-opera- 
tion and a uniformity of procedure in all the states to the end that dupli- 
cation of work may be avoided as much as possible. Of course the states 
and cities by virtue of their closer affiliation with the people of that locality 
enjoy benefits not within the reach of the general Government, as the 
state and local organizations have officers of local acquaintance who 
know the wants and necessities of the communities they represent, and 
have an intimate knowledge of conditions superior to that of the Federal 
agents. But there are elements which the national government possess 



302 SOCIAL INSURANCE. [Feb. 

which neither the state nor the municipalities can claim, and these, com- 
bined with the opportunities that the local officers present, make an 
ideal combination for the employment system. 

To promulgate in any manner information concerning workmen wanted 
where a strike exists or is threatened would be inconsistent with the pur- 
pose for which the Department was created, namely, "to foster, promote 
and develop the welfare of the wage-earners of the United States, to im- 
prove their working conditions and to advance their opportunities for 
profitable employment." Not only would it not advance such oppor- 
tunities, but it would have the reverse effect. Such a policy would be 
equivalent to directing wage-earners to places already sufficiently sup- 
plied with labor. Conditions of employment are in dispute and that is 
all which involves the question of profitable employment — profitable to 
wage-earners. It, therefore, follows that the Department of Labor should 
not make itself a medium for conveving information of demands for wage- 
earners where labor disputes are the cause of the demands. 

Finding a permanent job for a man is not the only work performed by 
this Service, for its energies have been directed toward supplying help 
particularly in agricultural industries during the harvest season, but the 
greatest problem here seems to be the matter of transportation. How 
can the people who volunteer for seasonal and other labor be transported? 
The ordinary method, of course, is open, but it is an expensive proposition 
to travel long distances, and so during the past vear efforts have been 
made to secure the legislation necessary to enable railroads to arrange 
with the Department for reduced rates. In fact a bill has been intro- 
duced in the Senate by Senator Newlands which has the approval of the 
Department, which would authorize and regulate, special to approval 
by the Interstate Commerce Commission, special rates of interstate 
transportation for persons directed to employment by the Department 
of Labor. 

Pursuant to recommendations of the Commissioner-General, a Women's 
and Girls' Division was organized in the Employment Service toward the 
close of the present fiscal year, and recommendation has been made that 
the Employment Service develop plans for the industrial needs of aged 
people. This recommendation has for its basis the fact that modern con- 
ditions condemn to the human scrap pile many able bodied and active 
brained men, and many intelligent, educated and competent women 
whose only defect is their having passed a certain abritrarily defined 
age limit. 

• The development of the Employment Service and the rapidity with 
which it has grown since becoming firmly established is illustrated by 
the fact that in the years 1908-1909, 26,477 applications for employment 
were submitted and 5,000 persons placed in employment, whereas during 
the past year, which might be said to be the first in which the work of the 
U. S. Employment Service was carried on anything like a national scale, 
184,481 applications were submitted and 75,195 were placed in employ- 






1917.] HOUSE — No. 1S50. 303 

ment, which represented the number of opportunities filled out of a total 
received of 109,771. These figures do not include harvest help and other 
temporary placements which were made. 

There seems to be no question in the minds of the Bureau that no matter 
how unfavorable economic conditions may be there is a job somewhere 
for every man or woman out of work who desires employment. The 
difficulty has been in such times that the knowledge of the existence of 
jobs was not and could not be brought to the attention of those seeking 
the same. , It is bej^ond the power of individuals to get this information 
for themselves unless jobs are in the immediate vicinity where they 
reside. It is, therefore, the duty of the Government, not only federal, 
but state and municipal, to bend their energies, separately, if they insist 
upon it, but co-operatively if effectiveness is to be secured, to the end 
that such information may be placed at the disposal of the people. 



304 SOCIAL INSURANCE. [Feb. 



Appendix D. 



HOURS OF LABOR IN CONTINUOUS INDUSTRIES. 

An Act to regulate the Hours of Labor of Certain Employees 
in Industrial Establishments operating Day and Night. 

Be it enacted, etc., as follows: 

1 Section 1. No person who is employed in any industrial estab- 

2 lishment which is in operation both day and night, either continuously 

3 or intermittently, shall, except in case of emergency, be required, 

4 requested or permitted to work more than eleven hours in any con- 

5 tinuous period of twenty-four hours. 

1 Section 2. Only a case of danger to property, to life, to public 

2 safety or to public health shall be considered a case of emergency 

3 within the meaning of this act, except in case of employment for the 

4 repair, renewal, adjustment or care of machinery or appliances in 

5 order to maintain the same in continuous operation and except in 

6 case of employment of a worker in substitution for and in the tem- 

7 porary absence of another. 

1 Section 3. Any owner, superintendent or other agent in any such 

2 industrial establishment who requires, requests or permits any person 

3 therein employed to work more hours than herein specified during 

4 any continuous period of twenty-four hours, except in case of emergency 

5 as herein defined, shall be punished by a fine pf not less than fifty 

6 dollars nor more than one hundred dollars for each offense. 

1 Section 4. It shall be the duty of the state board of labor and 

2 industries to receive complaints concerning alleged violations of this 

3 act and to make or direct thereupon all needful and proper investiga- 

4 tions and prosecutions. 

1 Section 5. This act shall take effect on the first day of September 

2 in the year nineteen hundred and eighteen. 



1917.1 HOUSE — No. 1850. 305 



An Act to regulate the Hours of Labor of Certain Employees 
in Paper Mills operating Day and Night. 

Be it enacted, etc., as follows: 

1 Section 1. No person who is employed as a tour worker in any 

2 paper mill which is in operation both day and night, either continuously 

3 or intermittently, shall, except in case of emergency, be required, 

4 requested or permitted to work more than forty-eight hours in any one 

5 week nor more than eight hours in any one calendar day. 

1 Section 2. Only a case of danger to property, to life, to public 

2 safety or to public health shall be considered a case of emergency 

3 within the meaning of this act, except in case of employment for the 

4 repair, renewal, adjustment or care of machinery or appliances in 

5 order to maintain the same in continuous operation and except in 

6 case of employment of a tour worker in substitution for and in the 

7 temporary absence of another. 

1 Section 3. For the purpose of this act the expression "tour work- 

2 ers" shall mean all employees who tend or are employed for the pur- 

3 pose of tending machinery or appliances of any description which are 

4 operated both day and night, either continuously or intermittently, 

5 and shall be deemed to include machine tenders and their helpers, 

6 cutter tenders and all other persons whose attendance is required in 

7 consequence of the continuity of operation of such machinery or ap- 

8 pliances. 

1 Section 4. Any owner, superintendent or other agent in any such 

2 paper mill who requires, requests or permits any person therein em- 

3 ployed as a tour worker to work more hours than herein specified 

4 during any one calendar day or during any one week, except in case 

5 of emergency as herein defined, shall be punished by a fine of not less 

6 than fifty dollars nor more than one hundred dollars for each offense. 

1 Section 5. It shall be the duty of the state board of labor and 

2 industries to receive complaints concerning alleged violations of this 

3 act and to make or direct thereupon all needful and proper investi- 

4 gations and prosecutions. 

1 Section 6. This act shall take effect on the first day of September 

2 in the year nineteen hundred and seventeen. 



306 SOCIAL INSURANCE. [Feb. 



DESCRIPTIVE ACCOUNT OF UNEMPLOYMENT INSURANCE 
IN FOREIGN COUNTRIES. 

Prepared by the Massachusetts Bureau of Statistics. 

Introduction. 

Unemployment is a form of maladjustment between the demands of 
industry and the suppfy of labor and is one of the fundamental problems 
confronting every nation. Even in times of greatest industrial activity 
there is always an "irreducible minimum of unemployment" due to trade 
and seasonal fluctuations, change of employment, or some other cause. 
The various European countries have attempted to relieve unemploy- 
ment chiefly through systems of social insurance. Two methods of in- 
surance — compulsory and voluntary — '■ have generally been followed. 
Great Britain is the only government which has established a compulsory, 
contributory unemployment insurance system. In most of the continental 
countries various schemes of voluntary unemployment insurance have 
been in operation. Denmark grants a state subsidy to recognized societies 
giving unemployment benefits. In Germany, on the other hand, the gov- 
ernment has not provided a national system of unemployment insurance, 
■ — that function of providing such insurance being performed by the 
municipalities which have adopted systems modelled after the Ghent 
system, in accordance with which public subsidies are granted to labor 
organizations paying out-of-work benefits. In Belgium, France, the 
Netherlands, Norway, and Italy state grants are made to municipal un- 
employment funds. In Switzerland both voluntary and compulsory 
insurance are commonly found. 

This study briefly describes the various foreign systems in operation, 
particularly with reference to their history, the basis of contributions, 
the benefits granted, and their administration. 

United Kingdom. The Compulsory Unemployment Insurance Act was 
adopted December 16, 1911, and went into effect July 15, 1912. It forms part II 
of the British National Insurance Act and was amended in 1914 in matters of 
administrative technique. 

Previous discussions of the subject led up to the Labor Exchanges Act of 1909, 
which empowered the Board of Trade to establish a national system of labor 
registries. By December, 1911, 261 of these offices had been established. 

The Act of 1911 applies to construction and engineering occupations only, or, 
more specifically, to the trades of building, shipbuilding, construction, mechanical 
engineering, iron founding, manufacture of vehicles, and sawmilling; and affects 
all workmen over 18 years of age engaged in these trades. About 2,400,000 
employees are included at present within the terms of the Act. The Board of 
Trade is given power, however, to extend the Act to other trades. Those not yet 
covered by the law may receive through voluntary mutual aid associations giving 
out-of-work benefits a State Subsidy of not over one-sixth of the premiums paid 
out, provided the association benefit does not exceed 12s. ($2.92) a week. This 
subsidy is paid from moneys granted by Parliament and is not paid from the 
National Unemployment Fund. 



1917.] HOUSE — No. 1850. 307 

Equal weekly contributions of 2£d. ($0.05) are levied on employer and employed, 
to which the State adds lfd. ($0.03) weekly. For casual labor Id. ($0.02) a day 
is due from both parties concerned, and for three days' work the regular week rate. 
The worker's share may be deducted from his wage by the employer, who is re- 
sponsible for the combined payments. The latter, however, may claim reimburse- 
ment of one-third of his own contribution for any workman employed by him 
continuously for at least 45 weeks throughout one year. On the other hand, 
insured workmen at the age of 60 may claim repayment of the difference, if any, 
between their contributions made and the amount drawn by them in unemploy- 
ment benefits, together with annual compound interest at 2\ per cent. 

In return for contributions the insured workman receives during unemployment 
a weekly allowance of 7s. ($1.70) from the second to the fifteenth week in any one 
year, provided he has paid five weekly premiums for every weekly benefit claimed. 
Some other qualifications upon which receipt of the benefit is conditioned, are: 
That unemployment has not been caused by strike, or lockout, or personal mis- 
conduct; that work as well paid as his own cannot be obtained through the national 
labor exchanges; that 10 full weekly contributions have been made. Workers 
engaged in housebuilding and construction receive a sum of 6s. ($1.46) a week; 
boys under 18, who pay at the rate of 2d. ($0.04) per week; correspondingly receive 
but one-half benefit. 

These benefits may be reduced by the Board of Trade in times of industrial 
crises to not less than 6s. ($1.46) per week for a period under 15 weeks, if necessary. 
Another precautionary measure to guard against excessive depletion of the Fund 
empowers the Board of Trade to raise by not over Id. ($0.02) the weekly dues 
from both employer and employed. This revision of contributions can be under- 
taken, however, only at intervals of five years or more. It is also provided that if a 
■worker becomes chronically unemployed from lack of skill, the insurance authorities 
may require him to attend such technical courses of instruction as they may furnish. 

The insurance is carried by the National Unemployment Fund accumulated 
by the payment of dues by employers and workers and by the addition of State 
subsidies of one-third of these combined contributions. The total State contribu- 
tion paid in 1913 amounted to £378,000 ($1,839,537). Ten per cent of the income 
of the Fund is applied to the payment of administrative expenses and any remaining 
administrative expenses are paid by the State. 

The National Labour Exchange Organization is an indispensable feature of the 
law. Its 430 offices, together with eight divisional and 1,066 local offices, act as 
agents under the supervision of the Central Office, which is a department of the 
Board of Trade. Existing trade unions giving an unemployment allowance may 
also become agents and may claim a refund on benefits paid not exceeding two- 
thirds of the amount the union itself has expended for this purpose. The umpire 
appointed by the Crown for the settlement of differences is independent of the 
Board of Trade and his decisions are final. 

During 1912-1913, 105 trade unions with an estimated membership of 539,775, 
and 172 unions with an estimated membership of 376,041 in non-insured trades, 
made arrangements with the Board of Trade to obtain the State subsidy for 
out-of-work benefit. The industries most fully represented were the textile, boot 
and shoemaking, printing and paper trades. The total expenditure as unemploy- 
ment benefits between January 8 and July 11, 1913, when benefits were payable, 
was approximately £236,458 ($1,150,723), representing 774,494 payments. 

Denmark. A law passed April 9, 1907, to take effect August 1, 1907, provided 
for public assistance of voluntary insurance against unemployment in Denmark. 
This act was subsequently amended, in regard to the scope of membership and 
limits of subsidies, on April 8, 1914, enacted April 1, 1915. The law affects all 
workers "without means" between the ages of 18 and 60, who are members of 
recognized associations furnishing insurance against unemployment and who have 
paid dues for at least 1 year. Wage- earners serving ^vith the colors are exempt from 
the law. 



308 SOCIAL INSURANCE. [Feb. 

Out-of-work benefit is given after a waiting period of from 6 to 15 days — up 
to 1 month in seasonal trades — in the form of \ ($0,134) to 2 Kroner ($0.54) 
per day for 70 to 160 days in any one year. If such an allowance has been received 
by a member for 210 successive days, a full year must elapse during which fees must 
be regularly paid before he is entitled to further cash aid. If temporary work at 
lower wages is found and accepted, the association may augment that wage to the 
limit of the cash grant which a member can claim. Out-of-work benefit may also be 
made in the form of immediate payments for travel or removal, assistance towards 
rent, or of gifts in kind. Members refusing other work offered them, receiving 
poor-relief or sick-aid, and members in prison are granted no benefits. 

Under the old law recognized associations with a yearly minimum membership 
of 50 received for their special unemployment fund an annual State subsidy of 
one-third the total amount of premiums paid by members up to a maximum limit 
of 250,000 kroner ($67,000), while the communal and municipal reimbursements 
amounted each to one-sixth of such premiums. Under the new law these subsidies 
are increased to one-half and one-third, respectively; provided that, if necessary, 
the State grant may be reduced or withheld in any year so as not to exceed the 
total of 999,538 kroner ($267,876) given in 1913-1914; and that the amount paid 
by the communes to societies within their districts may equal one-third of total 
contributions of full members. In 1914 the dues paid by 139,500 members amounted 
to 1,658,648 kroner ($444,518) and the 57 recognized associations received in that 
year a communal subsidy of 448,701 kroner ($120,252). 

The supervising authority is vested in a salaried Government Inspector under 
the Minister of the Interior. This inspector is also Chairman of the Insurance 
Commission. Its six representatives, of whom four must be members of the Danish 
Parliament, are selected from among the delegates sent to the annual meeting by 
each association. They hold office for six years, three retiring every third year. 

Germany. The Imperial Government has thus far not undertaken insurance 
against unemployment, and when the subject came up for discussion in the Reichs- 
tag, the Government was not favorable to schemes of assisted insurance. The 
question was also discussed in the parliaments of some of the Federated States, 
but proposals made in 1910 were rejected by Saxony and "Wurtemberg. The general 
feeling is that the Imperial Government should take the initiative in measures 
regarding this branch of insurance. 

A number of large German municipalities adopted the Ghent system of unemploy- 
ment insurance, or a modified form of it, and their schemes are carried out in close 
connection with labor exchanges. Organizations have existed in Cologne since 
1896; Leipsic, since 1905; Strassburg, since 1906; Erlangen and Muhlhausen 
since 1909; Freiburg, since 1910; Heidelberg and Niirnberg, since 1911. Each 
organization has its own method of administration and assistance. Plans for 
municipal unemployment insurance are under consideration in Berlin, Hamburg, 
Munich, and other cities. 

Belgium. Voluntary insurance against unemployment is assisted in Belgium 
by the communes, the provinces, and the State through subsidies to trade unions 
giving out-of-work benefits. This system of liberal subsidies was first developed 
in 1901 in Ghent, and has been adopted since then by all municipalities with a 
population of over 35,000. Later the provinces joined in the scheme, and since 
1907 the State has granted a small subsidy to insurance effected through communal 
unemployment funds and trade unions affiliated to communal funds, and to 
recognized unaffiliated associations giving out-of-work benefits. 

By order of January 30, 1911, a permanent committee of 15 was established 
under the supervision of the Minister of Industry and Labor. The members of 
this committee are chosen from among the recognized trade unions, the labor 
exchanges, and the institutions insuring against involuntary unemployment. 
They hold office for four years and may meet four times a year. The function of 
this committee is to assist the Government in advising and developing the most 



1917.] HOUSE — No. 1850. 309 

effective means of guarding against the consequences of involuntary unemploy- 
ment. 

The communal funds pay subsidies through the trade unions, with the exception 
of Liege, where the grant is paid to individual trade-unionists after the system 
adopted at Ghent. Since the distribution is effected through the unions, the admin- 
istrative cost for the communal schemes is comparatively low. Each province has 
its own method of distributing its subsidy. The State grant is in proportion to 
the unemployment benefit disbursed. It usually equals 60 per cent, but cannot 
exceed 100 per cent, of the original allowance paid and is not paid to the same 
person for more than 60 days in any one year. 

France. Unemployment insurance in France is assisted through existing 
trade unions in about 14 departments, 86 communes, and a number of large munic- 
ipalities. Among the latter are Paris, Lyons, Limoges, Dijon, Armentieres, and 
Roubaix, some of which adopted the Ghent insurance system. The State has 
granted a small annual subsidy since 1905 to unemployment insurance associations. 

As a temporary war measure a National Fund for Unemployment was proposed 
on August 20, 1914, and established together with communal and departmental 
funds, by three Acts in 1914. In 1914, also, a central labor exchange for unemployed 
and refugees was opened. State grants, fixed at 33 per cent of the benefits dis- 
bursed, may be paid out of the National Fund to these other funds, provided the 
communities have a population of at least 10,000. It is expected that in the future 
better industrial conditions will make the continuance of this measure unnecessary. 
For the present, individual benefits during periods of unemployment must not be 
more than 1.25 francs ($0.24) for every unemployed head of a family, and 50 
centimes ($0.10) for every dependent or out-of-work person living in the family. 

Netherlands. Since 1906 insurance against unemployment in the Netherlands 
has been assisted (following the Ghent plan) by at least 25 municipalities, includ- 
ing Amsterdam, The Hague, Leyden, Zwolle, Utrecht, Haarlem, and others. As 
early as 1907 the Government proposed payment of a subsidy to assisted insurance; 
but no action was taken in the matter at the time. In 1914, however, the State 
contributed for this purpose 555,672.63 florins ($223,380) and voted in 1915 to 
spend 12,297,525 florins ($4,943,605). 

In 1914 there were 28 communal and 306 affiliated and other insurance funds 
against unemployment, with a total membership of 34,533. The benefits paid in 
that year amounted to 1 ,331,010.78 florins ($535,066) . Twenty-nine labor exchanges 
in the kingdom found in 1914 employment for 46,055 men and 39,195 women. 

Norway. In 1904 a commission was appointed to make a preliminary study 
of unemployment insurance in Norway. On June 12, 1906, an act, modelled on 
the Ghent system, was passed to take effect October 1, 1906, subject to revision in 
1911, granting State subsidies to voluntary trade unions providing out-of-work 
benefits. The act was amended on July 25, 1908, in respect of increase in the rates 
of State subsidy. On August 15, 1911, the act was renewed to remain in force until 
December 31, 1914. It was again renewed August 6, 1915*. The act applies to 
all trade unions which grant insurance against unemployment to their members, 
as well as to recognized trade unions, if one-half of their revenue consists of members' 
contributions paid for at least 26 successive weeks. Any wage-earner desiring 
insurance against unemployment, and following the same trade as a union member, 
must be admitted to regular membership, irrespective of his objection to the 
general policy^ of the trade union. But such a member can neither vote nor par- 
ticipate in administering funds; and can be required to pay from 10 to 25 per cent 
more toward the cost of administration. 

The maximum limit of out-of-work benefit is one-half the usual normal wage, 
and is paid only to members of six months' standing. Payment begins on the 
third day of unemployment and continues for not more tha*n 90 days in the year 
to the same person. It is limited by law to Norwegian citizens or to those who have 
been residents in Norway for five consecutive years; to insured persons whose 



310 SOCIAL INSURANCE. [Feb. 

unemployment is due only to want of work; and to wage-earners who are members 
of not more than one association. No allowance is paid during unemployment 
caused by strike or lock-out; or to members refusing work offered them by the 
administration of the association. 

The original State subsidy of one-quarter of the annual unemployment benefit 
disbursed, was raised by amendment in 1908 to one-third of the amount. This 
sum is paid in the frst instance by the central government, but two-thirds of the 
grant are annually recovered from the local, rural, or urban authorities, except in 
the case of workmen employed on public railways, roads, and similar works. 

The trade unions are closely allied in their control of unemployment with existing 
public labor exchanges. The administration, in turn, is controlled by communal 
insurance commissioners elected for a term of three years, and supervised by the 
central Government. 

In 1913, 18 trade unions received from 30,329 members fees amounting to 211,392 
kroner ($56,653); communal subsidies of 35,528 kroner ($9,522), and a State grant 
of 7,612 kroner ($2,040). Out-of-work benefits amounting to 180,922 kroner 
($48,487) were paid to 5,027 members for 98,395 days of unemployment. The 
cost of administration in that year was 6,744 kroner ($1,807). 

Italy. A few large municipalities in Italy grant subsidies to trade associations 
having unemployment insurance funds. In Milan a privately endowed philan- 
thropic fund, the Humanitarian Society, has paid an unemployment subsidy 
since 1905. Padua first voted a subsidy in 1909; Brescia, in 1910; Turin, Modena, 
and other towns are having proposals under discussion. In July, 1910, a bill passed 
the Italian Chamber proposing a State subsidy of 4000 lire ($772) to associations 
having at least 50 members and paying out-of-work benefits. This bill passed 
the Senate in October, 1910, but no official statistics are available relative to its 
operation. 

The subsidy paid at Milan is at the rate of 50% of the out-of-work benefit which 
may be given for 60 days in the year. The system is managed by a committee of 
four members, two representing the Humanitarian Society, and two the affiliated 
associations. 

Switzerland. Schemes of compulsory insurance against unemployment were 
proposed in the Town Council of Zurich in 1898, but were not then adopted. On 
December 21, 1914, the Cantonal Council of Zurich, however, voted a grant of 
15,000 francs ($2,895) for the assistance of trade union unemployment funds. 
Proposals relative to such insurance were made to the legislative body at Basle, 
and a bill was passed by the Great Council in 1899, but on being submitted to 
referendum this bill was decisively rejected. A private scheme of unemployment 
insurance, established in 1901 by the Basle Labor Federation had to be abandoned 
ultimately. St. Gall is the only place where insurance against unemployment was 
made compulsory. It became operative in 1894, and was continued for some years. 
As it was administered by the Poor Law Department and therefore connected in 
the minds of the people with poor-relief, the better class of workmen bitterly opposed 
tfie plan. This resulted in its failure and its early abandonment. In 1904 Geneva 
founded a scheme on the Berne model to be operated in connection with the labor 
office, but the city finally relinquished it as the workmen did not respond to it and 
trade-unions were hostile. 

Subsidized unemployment insurance has been more favorably accepted in 
Switzerland. The first municipal unemployment insurance fund was established 
by Berne in April, 1893. This fund is connected with the labor exchange and 
both are administered by a committee of nine members, holding office for four 
years. The plan is restricted to workmen under 60 years of age, who are Swiss 
citizens and residents of Berne. The rate of contribution is low, and the same rate 
is paid by skilled and unskilled workers. Benefit is received for not more than 60 
days in a year. It is paid for unemployment only during the winter months, and 
is somewhat higher for members with dependents. No benefit is granted for the 



1917.] HOUSE — No. 1850. 311 

first week of unemployment. In Geneva in 1909 the scheme adopted in 1904, 
which had utterly failed, was replaced by one following the Strassburg example, 
in accordance with which assistance is guaranteed for ten years at the rate of 60% of 
benefits disbursed, to associations providing insurance against unemployment. 
Their members must have resided at least one year in Geneva, and benefits are paid 
to the same person for not more than 60 days in any one year. After the earlier 
failures of 1899 and 1901 the cantonal government of Basle again considered the 
unemployment problem. The Great Council, after considering preliminary pro- 
posals, enacted the law of December 16, 1909, establishing a State Unemployment 
Fund, to take effect May 2, 1910. Any wage-earner over 17 years of age may 
insure himself if he has resided at Basle for at least six months previous, and if 
he is not already a member of a private unemployment fund. 

Contributions vary according to work, earnings, and family circumstances and 
benefits are in proportion to these varying rates of contribution. From the fourth 
day of involuntary unemployment full benefit of not more than two-thirds of the 
normal wage is paid for 35 days; for the remaining 35 days, half-benefit is paid. 
A special traveling benefit is paid to those taking up work offered them outside 
the canton. 

The State defrays the cost of establishing and administering the Fund, and 
grants an annual subsidy limited to 35,000 francs ($6,755) for the first three years. 
The Fund is controlled by a committee of eleven members, who hold office for 
three years and who are under the supervision of the Department of the Interior. 
The Executive Council of Basle appoints six of these members, and the other five 
are chosen by the insured persons from among themselves. Members receive two 
francs ($0.39) for every meeting*attended. The Fund grants two kinds of subsidies 
to voluntary associations providing unemployment insurance. A subsidy of from 
20 to 40% of membership dues is paid into a reserve fund providing for periods of 
crises. If this reserve fund exceeds a certain fixed b'mit, the subsidy may be 
suspended. The other subsidy of from 30 to 60% of out-of-work benefits disbursed 
may be spent at will by the association for purposes of insurance against unemploy- 
ment. Payment of this grant may be discontinued if the total property of the 
association exceeds a certain fixed amount. St. Gall has also paid a small municipal 
subs ; dy since 1905. 

Of more importance, however, are the measures taken by the Swiss lace and 
embroidery industry. An employers' association was formed at St. Gall which 
proposed to subsidize special "crisis funds " providing against industrial depression. 
The three trade-unions promoted the scheme warmly, so that by December, 1908, 
fifty such "crisis funds" had been formed. The rates of contribution are slightly 
lower for women than for men. An allowance is given to the same person from 
the second day of unemployment up to a maximum of 1.50 francs ($0.29) per day 
for 50 days in the year. Thus the subsidy paid by the employers' association is 
60% of the benefit provided. Appenzell a-B,hin also pays a cantonal subsidy of 
50% of unemployment benefit to "crisis funds" in the embroidery industry. 



